Document:

GUARANTEE
AGREEMENT

       

      by
and between

       

      MAIDEN
HOLDINGS, LTD.

       

      and

       

      WILMINGTON
TRUST COMPANY

       

      Dated
as of January 20, 2009

       

      
        

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

TABLE OF
CONTENTS

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        	 
      	 
      	
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                                                                                ARTICLE
      I

                                                                              	
                                                                                DEFINITIONS
      AND INTERPRETATION

                                                                              	
                                                                                1

                                                                              
	 	 	 
	
                                                                                Section
      1.1

                                                                              	
                                                                                Definitions
      and Interpretation

                                                                              	
                                                                                1

                                                                              
	 	 	 
	
                                                                                ARTICLE
      II

                                                                              	
                                                                                POWERS,
      DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

                                                                              	
                                                                                6

                                                                              
	 	 	 
	
                                                                                Section
      2.1

                                                                              	
                                                                                Powers
      and Duties of the Guarantee Trustee

                                                                              	
                                                                                6

                                                                              
	 	 	 
	
                                                                                Section
      2.2

                                                                              	
                                                                                Certain
      Rights of the Guarantee Trustee

                                                                              	
                                                                                7

                                                                              
	 	 	 
	
                                                                                Section
      2.3

                                                                              	
                                                                                Not
      Responsible for Recitals or Issuance of Guarantee

                                                                              	
                                                                                9

                                                                              
	 	 	 
	
                                                                                Section
      2.4

                                                                              	
                                                                                Events
      of Default; Waiver

                                                                              	
                                                                                9

                                                                              
	 	 	 
	
                                                                                Section
      2.5

                                                                              	
                                                                                Events
      of Default; Notice

                                                                              	
                                                                                9

                                                                              
	 	 	 
	
                                                                                ARTICLE
      III

                                                                              	
                                                                                GUARANTEE
      TRUSTEE

                                                                              	
                                                                                10

                                                                              
	 	 	 
	
                                                                                Section
      3.1

                                                                              	
                                                                                Guarantee
      Trustee; Eligibility

                                                                              	
                                                                                10

                                                                              
	 	 	 
	
                                                                                Section
      3.2

                                                                              	
                                                                                Appointment,
      Removal and Resignation of the Guarantee Trustee

                                                                              	
                                                                                10

                                                                              
	 	 	 
	
                                                                                ARTICLE
      IV

                                                                              	
                                                                                GUARANTEE

                                                                              	
                                                                                11

                                                                              
	 	 	 
	
                                                                                Section
      4.1

                                                                              	
                                                                                Guarantee

                                                                              	
                                                                                11

                                                                              
	 	 	 
	
                                                                                Section
      4.2

                                                                              	
                                                                                Waiver
      of Notice and Demand

                                                                              	
                                                                                12

                                                                              
	 	 	 
	
                                                                                Section
      4.3

                                                                              	
                                                                                Obligations
      Not Affected

                                                                              	
                                                                                12

                                                                              
	 	 	 
	
                                                                                Section
      4.4

                                                                              	
                                                                                Rights
      of Holders

                                                                              	
                                                                                13

                                                                              
	 	 	 
	
                                                                                Section
      4.5

                                                                              	
                                                                                Guarantee
      of Payment

                                                                              	
                                                                                13

                                                                              
	 	 	 
	
                                                                                Section
      4.6

                                                                              	
                                                                                Subrogation

                                                                              	
                                                                                13

                                                                              
	 	 	 
	
                                                                                Section
      4.7

                                                                              	
                                                                                Independent
      Obligations

                                                                              	
                                                                                13

                                                                              
	 	 	 
	
                                                                                Section
      4.8

                                                                              	
                                                                                Enforcement
      by a Beneficiary

                                                                              	
                                                                                14

                                                                              
	 	 	 
	
                                                                                ARTICLE
      V

                                                                              	
                                                                                SUBORDINATION

                                                                              	
                                                                                14

                                                                              
	 	 	 
	
                                                                                Section
      5.1

                                                                              	
                                                                                Limitation
      of Transactions

                                                                              	
                                                                                14

                                                                              
	 	 	 
	
                                                                                Section
      5.2

                                                                              	
                                                                                Ranking

                                                                              	
                                                                                15

                                                                              
	 	 	 
	
                                                                                ARTICLE
      VI

                                                                              	
                                                                                TERMINATION

                                                                              	
                                                                                16

                                                                              
	 	 	 
	
                                                                                Section 6.1

                                                                              	
                                                                                Termination

                                                                              	
                                                                                16

                                                                              
	 	 	 
	
                                                                                ARTICLE
      VII

                                                                              	
                                                                                INDEMNIFICATION

                                                                              	
                                                                                16

                                                                              
	 	 	 
	
                                                                                Section 7.1

                                                                              	
                                                                                Exculpation

                                                                              	
                                                                                16

                                                                              
	 	 	 
	
                                                                                Section 7.2

                                                                              	
                                                                                Indemnification

                                                                              	
                                                                                16

                                                                              
	 	 	 
	
                                                                                Section 7.3

                                                                              	
                                                                                Compensation; Reimbursement of Expenses

                                                                              	
                                                                                17

                                                                              

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
           

        

        
          i

          
            

          

        

        
           

        

      

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      ARTICLE
      VIII

                                    	
                                      MISCELLANEOUS

                                    	
                                      18

                                    
	 	 	 
	
                                      Section 8.1

                                    	
                                      Successors and Assigns

                                    	
                                      18

                                    
	 	 	 
	
                                      Section 8.2

                                    	
                                      Amendments

                                    	
                                      18

                                    
	 	 	 
	
                                      Section 8.3

                                    	
                                      Notices

                                    	
                                      18

                                    
	 	 	 
	
                                      Section 8.4

                                    	
                                      Benefit

                                    	
                                      19

                                    
	 	 	 
	
                                      Section 8.5

                                    	
                                      Governing Law

                                    	
                                      19

                                    
	 	 	 
	
                                      Section 8.6

                                    	
                                      Counterparts

                                    	
                                      19

                                    
	 	 	 
	
                                      Section 8.7

                                    	
                                      Separability

                                    	
                                      19

                                    

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

      GUARANTEE
AGREEMENT

       

      This
GUARANTEE AGREEMENT (this “Guarantee”), dated as
of January 20, 2009, is executed and delivered by Maiden Holdings, Ltd., a
company organized under the laws of Bermuda (the “Guarantor”), and
Wilmington Trust Company, a Delaware banking corporation, as trustee (the “Guarantee Trustee”),
for the benefit of the Holders (as defined herein) from time to time of the
Capital Securities (as defined herein) of Maiden Capital Financing Trust, a
Delaware statutory trust (the “Issuer”).

       

      WHEREAS,
pursuant to an Amended and Restated Declaration of Trust (the “Declaration”), dated
as of the date hereof among Wilmington Trust Company, not in its individual
capacity but solely as institutional trustee, the administrators of the Issuer
named therein, Maiden Holdings North America, Ltd., a Delaware corporation (the
"Company"), as
sponsor, 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 those
undivided beneficial interests, having an aggregate liquidation amount of
$260,000,000.00 (the “Capital Securities”);
and

       

      WHEREAS,
as incentive for the Holders to purchase the Capital Securities, the Company is
entering into a Guarantee Agreement (the “Company Guarantee”)
with the Guarantee Trustee by which the Company irrevocably and unconditionally
agreed, to the extent set forth in the Company Guarantee, to pay to the Holders
of Capital Securities the Guarantee Payments (as defined therein) and to make
certain other payments on the terms and conditions set forth
therein;

       

      WHEREAS,
as a further incentive for the Holders to purchase the Capital Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth in this Guarantee, to pay to the Holders of Capital Securities 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 the Capital
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the Holders.

       

      ARTICLE
I

       

      DEFINITIONS
AND INTERPRETATION

       

      Section
1.1     Definitions and
Interpretation.

       

      In this
Guarantee, unless the context otherwise requires:

       

      (a)           capitalized
terms used in this 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 Guarantee has the same meaning
throughout;

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      (c)           all
references to “the Guarantee” or “this Guarantee” are to this Guarantee as
modified, supplemented or amended from time to time;

       

      (d)           all
references in this Guarantee to “Articles” or “Sections” are to Articles or
Sections of this Guarantee, unless otherwise specified;

       

      (e)           terms
defined in the Declaration as at the date of execution of this Guarantee have
the same meanings when used in this Guarantee, unless otherwise defined in this
Guarantee or unless the context otherwise requires; and

       

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

       

      “Additional Junior
Indebtedness” means, without duplication and other than the obligations
under this Guarantee, (a) any indebtedness, liabilities or obligations of the
Guarantor, or any Subsidiary of the Guarantor, under debt securities (or
guarantees in respect of debt securities) initially issued on or after the date
of this Guarantee to any trust, or a trustee of a trust, partnership or other
entity affiliated with the Company that is, directly or indirectly, a finance
subsidiary (as such term is defined in Rule 3a-5 under the Investment Company
Act of 1940) or other financing vehicle of the Guarantor or any Subsidiary of
the Guarantor in connection with the issuance by that entity of preferred
securities, (b) other securities that are issued either junior and subordinate
to or on a pari passu
basis with the obligations of the Guarantor under this Guarantee or (c) any
guarantees of the Guarantor in respect of the equity or other securities of any
entity referred to in clause (a).

       

      “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.

       

      “Beneficiaries” means
any Person to whom the Issuer is or hereafter becomes indebted or
liable.

       

      “Capital Securities”
has the meaning set forth in the recitals to this Guarantee.

       

      “Common Securities”
means the common securities issued by the Issuer to the Guarantor pursuant to
the Declaration.

       

      “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
Guarantee is located at 1100 North Market Street, Wilmington, Delaware
19890-1600, Attention: Corporate Trust Administration.

       

      “Covered Person” means
any Holder of Capital Securities.

       

      “Debentures” means the
debt securities of the Guarantor designated the Fixed Rate Junior Subordinated
Deferrable Interest Debentures due 2039 held by the Institutional Trustee (as
defined in the Declaration) of the Issuer.

       

      “Declaration Event of
Default” means an “Event of Default” as defined in the
Declaration.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      “Event of Default” has
the meaning set forth in Section 2.4(a).

       

      “Founders” means
George Karfunkel, Michael Karfunkel, any of their respective Affiliates and any
of their charitable or family trusts.

       

      “Guarantee Payments”
means all of the obligations of the Company under the Indenture and the
Debentures, and all of the obligations of the Company to the Guarantee Trustee
under the Company Guarantee, including, without duplication, to the extent not
paid by the Issuer; with respect to the Capital Securities, to the extent not
paid or made by the Issuer or the Company:  (i) any accrued and
unpaid Distributions (as defined in the Declaration) which are required to
be paid on such Capital Securities to the extent the Issuer shall have funds
available therefor, (ii) the Optional Redemption Price to the extent the
Issuer has funds available therefor, with respect to any Capital Securities
called for redemption by the Issuer, (iii) the Special Redemption Price to
the extent the Issuer has funds available therefor, with respect to Capital
Securities redeemed upon the occurrence of a Special Event, (iv) upon a
voluntary or involuntary liquidation, dissolution, winding-up or termination of
the Issuer (other than in connection with the distribution of Debentures to the
Holders of the Capital Securities in exchange therefor as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and
all accrued and unpaid Distributions on the Capital Securities to the date of
payment, to the extent the Issuer shall have funds available therefor, and
(b) the amount of assets of the Issuer remaining available for distribution
to Holders in liquidation of the Issuer (in either case, the “Liquidation
Distribution”) and (v) the Change of Control Purchase Price (as
defined in the Declaration) to the extent the Issuer has funds available
therefor which is required to be paid with respect to any Capital Securities in
connection with a Change of Control (as defined in the Indenture); and further
including, without duplication, with respect to the Company Guarantee, (I) the
assumption by the Company of any and all Obligations of the Issuer pursuant to
Section 4.1(b) of the Company Guarantee, and (II) the obligations of the
Company as to indemnification and compensation under Sections 7.2 and 7.3
of the Company Guarantee.

       

      “Guarantee Trustee”
means Wilmington Trust Company, until a Successor Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Guarantee and thereafter means each such Successor Guarantee
Trustee.

       

      “Guarantor” means
Maiden Holdings, Ltd. and each of its successors and assigns.

       

      “Holder” means any
holder, as registered on the books and records of the Issuer, of any Capital
Securities and such term shall also refer to and include the holders of the
Debentures if the Debentures are distributed to holders of the Capital
Securities and in such a case the term “Holder of the Capital Securities” shall
also refer to a holder of the Debentures; provided, however, that, in
determining whether the Holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, “Holder”
shall not include the Guarantor or any Affiliate of the Guarantor.

       

      “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.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      “Indenture” means the
Indenture dated as of the date hereof between the Company and Wilmington Trust
Company, not in its individual capacity but solely as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
institutional trustee of the Issuer.

       

      “Issuer” has the
meaning set forth in the opening paragraph to this Guarantee.

       

      “Liquidation
Distribution” has the meaning set forth in the definition of “Guarantee
Payments” herein.

       

      “Majority in liquidation
amount of the Capital Securities” means Holder(s) of outstanding Capital
Securities, voting together as a class, but separately from the holders of
Common Securities, of 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 Capital Securities then outstanding,
it being understood that if the Debentures are distributed to the holders of
the  Capital Securities, such term shall mean the holders of more than
50% of the aggregate principal amount (including the amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid interest to the
date upon which the voting percentages are determined) of the
Debentures.

       

      “Obligations” means
any costs, expenses or liabilities (but not including liabilities related to
taxes) of the Issuer other than obligations of the Issuer to pay to holders of
any Trust Securities the amounts due such holders pursuant to the terms of the
Trust Securities.

       

      “Officer’s
Certificate” means, with respect to any Person, a certificate signed by
one Authorized Officer of such Person. Any Officer’s Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee shall include:

       

      (a)           a
statement that the officer signing the Officer’s Certificate has read the
covenant or condition and the definitions relating thereto;

       

      (b)           a
brief statement of the nature and scope of the examination or investigation
undertaken by the officer in rendering the Officer’s Certificate;

       

      (c)           a
statement that the 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

       

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

       

      “Optional Redemption
Price” has the meaning set forth in the Indenture.

       

      “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.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      “Responsible Officer”
means, with respect to the Guarantee Trustee, any officer within the Corporate
Trust Office of the Guarantee Trustee including any Vice President, Assistant
Vice President, Secretary, Assistant Secretary or any other officer of the
Guarantee Trustee customarily performing functions similar to those performed by
any of the above designated officers and also, 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.

       

      “Senior Indebtedness”
means, with respect to the Guarantor, (i) the principal, premium, if any,
and interest in respect of (A) indebtedness of the Guarantor for money
borrowed and (B) indebtedness evidenced by securities, debentures, notes,
bonds or other similar instruments issued by the Guarantor; (ii) all
capital lease obligations of the Guarantor; (iii) all obligations of the
Guarantor issued or assumed as the deferred purchase price of property, all
conditional sale obligations of the Guarantor and all obligations of the
Guarantor under any title retention agreement; (iv) all obligations of the
Guarantor for the reimbursement of any letter of credit, any banker’s
acceptance, any security purchase facility, any repurchase agreement or similar
arrangement, any interest rate swap, any other hedging arrangement, any
obligation under options or any similar credit or other transaction;
(v) all obligations of the type referred to in clauses (i) through
(iv) above of other Persons for the payment of which the Guarantor is
responsible or liable as obligor, guarantor or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v) above of
other Persons secured by any lien on any property or asset of the Guarantor
(whether or not such obligation is assumed by the Guarantor), whether incurred
on or prior to the date of this Guarantee Agreement or thereafter
incurred.  Notwithstanding the foregoing, “Senior Indebtedness”
shall not include (1) any Additional Junior Indebtedness, (2) obligations of the
Guarantor in respect of the Debentures, (3) trade accounts payable of the
Guarantor arising in the ordinary course of business (such trade accounts
payable being pari passu in right of payment to the obligations under this
Guarantee), or (4) obligations with respect to which (a) in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is provided that such obligations are pari passu, junior or otherwise not
superior in right of payment to the obligations under this Guarantee and (b) the
Guarantor, prior to the issuance thereof, has, if required, notified the
relevant state insurance regulatory agency.  Senior Indebtedness shall
continue to be Senior Indebtedness and be entitled to the subordination
provisions irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.

       

      “Special Event” has
the meaning set forth in the Indenture.

       

      “Special Redemption
Price” has the meaning set forth in the Indenture.

       

      “Subsidiary”  means
with respect to any Person, (i) any corporation at least a majority of the
outstanding voting stock of which is owned, directly or indirectly, by such
Person or by one or more of its Subsidiaries, or by such Person and one or more
of its Subsidiaries, (ii) any general partnership, joint venture or similar
entity, at least a majority of the outstanding partnership or similar interests
of which shall at the time be owned by such Person, or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii)
any limited partnership of which such Person or any of its Subsidiaries is a
general partner.  For the purposes of this definition, “voting stock”
means shares, interests, participations or other equivalents in the equity
interest (however designated) in such Person having ordinary voting power for
the election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      “Successor Guarantee
Trustee” means a successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 3.1.

       

      “Trust Securities”
means the Common Securities and the Capital Securities.

       

      ARTICLE
II

       

      POWERS,
DUTIES AND RIGHTS OF THE

      GUARANTEE
TRUSTEE

       

      Section
2.1     Powers and Duties of the
Guarantee Trustee.

       

      (a)           This
Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders
of the Capital Securities, and the Guarantee Trustee shall not transfer this
Guarantee to any Person except a Holder of Capital Securities exercising his or
her rights pursuant to Section 4.4(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,
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
Guarantee for the benefit of the Holders of the Capital Securities.

       

      (c)           The
Guarantee Trustee, before the occurrence of any Event of Default and after the
curing or waiving of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee, and no implied covenants shall be read into this Guarantee against
the Guarantee Trustee.  In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.4) 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 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 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:

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      (A)           the
duties and obligations of the Guarantee Trustee shall be determined solely by
the express provisions of this 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 Guarantee, and no implied covenants or
obligations shall be read into this 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 conforming to the requirements of this
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 conform to the requirements of this
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 such Responsible Officer of the Guarantee Trustee or 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 written direction
of the Holders of not less than a Majority in liquidation amount of the Capital
Securities relating to the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee, or relating to the exercise
of any trust or power conferred upon the Guarantee Trustee under this Guarantee;
and

       

      (iv)           no
provision of this 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 Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds is not reasonably assured to it under the terms
of this Guarantee or security and indemnity, reasonably satisfactory to the
Guarantee Trustee, against such risk or liability is not reasonably assured to
it.

       

      Section
2.2     Certain Rights of the
Guarantee Trustee.

       

      (a)           Subject
to the provisions of Section 2.1:

       

       (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 Guarantee shall be
sufficiently evidenced by an Officer’s Certificate.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      (iii)          Whenever,
in the administration of this 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 Officer’s Certificate of the Guarantor
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 re-recording, refiling or re-registration
thereof).

       

      (v)           The
Guarantee Trustee may consult with counsel of its selection, and the 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
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 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, however, that nothing
contained in this Section 2.2(a)(vi) shall 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 Guarantee.

       

      (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 Capital 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 Guarantee, both of which shall be conclusively
evidenced by the Guarantee Trustee’s or its agent’s taking such
action.

      
        
           

        

        
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      (x)           Whenever
in the administration of this 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 Capital
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.

       

      (xi)           The
Guarantee Trustee shall not be liable for any action taken, suffered, or omitted
to be taken by it in good faith, without negligence, and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Guarantee.

       

      (b)           No
provision of this 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.

       

      Section
2.3     Not Responsible for Recitals
or Issuance of Guarantee.

       

      The
recitals contained in this 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 Guarantee.

       

      Section
2.4     Events of Default;
Waiver.

       

      (a)           An
Event of Default under this Guarantee will occur upon the failure of the
Guarantor to perform any of its payment or other obligations
hereunder.

       

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

       

      Section
2.5     Events of Default;
Notice.

       

      (a)           The
Guarantee Trustee shall, within 90 days after the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders of the
Capital Securities and the Guarantor, notices of all Events of Default actually
known to a Responsible Officer of the Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, however, 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 of the Capital
Securities.

      
        
           

        

        
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      (b)           The
Guarantee Trustee shall not be deemed to have knowledge of any Event of Default
unless the Guarantee Trustee shall have received written notice from the
Guarantor or a Holder of the Capital Securities (except in the case of a payment
default), or a Responsible Officer of the Guarantee Trustee charged with the
administration of this Guarantee shall have obtained actual knowledge
thereof.

       

      ARTICLE
III

       

      GUARANTEE
TRUSTEE

       

      Section
3.1     Guarantee Trustee;
Eligibility.

       

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

       

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

       

      (ii)           be
a banking corporation or national association 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 Person authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least fifty
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 or national association 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 3.1(a)(ii),
the combined capital and surplus of such corporation or national association
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 3.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set forth in Section 3.2(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
shall either eliminate such interest or resign to the extent and in the manner
provided by, and subject to this Guarantee.

       

      Section
3.2     Appointment, Removal and
Resignation of the Guarantee Trustee.

       

      (a)           Subject
to Section 3.2(b), the Guarantee Trustee may be appointed or removed without
cause at any time by the Guarantor except during an Event of
Default.

       

      (b)           The
Guarantee Trustee shall not be removed in accordance with Section 3.2(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.

      
        
           

        

        
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      (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 (without
need for prior or subsequent accounting) 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 an instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

       

      (d)           If
no Successor Guarantee Trustee shall have been appointed and accepted
appointment as provided in this Section 3.2 within 60 days after
delivery of an instrument of removal or resignation, the Guarantee Trustee
resigning or being removed may petition 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.

       

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

       

      (f)           Upon
termination of this Guarantee or removal or resignation of the Guarantee Trustee
pursuant to this Section 3.2, the Guarantor shall pay to the Guarantee Trustee
all amounts owing to the Guarantee Trustee under Sections 7.2 and 7.3
accrued to the date of such termination, removal or resignation.

       

      ARTICLE
IV

       

      GUARANTEE

       

      Section
4.1     Guarantee.

       

      (a)           The
Guarantor irrevocably and unconditionally agrees to pay in full to the Holders
the Guarantee Payments (without duplication of amounts theretofore paid by the
Issuer), as and when due, regardless of any defense (except the defense of
payment by the Issuer), 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 by direct payment of the required amounts by the
Guarantor to the Holders, by causing the Company to make payments required to be
made to the Holders under the Company Guarantee, and the payments required to be
made to the Issuer, or if the Debentures have been distributed to the Holders of
Capital Securities, to the Holders, under the Indenture and the Debentures, or
by causing the Issuer to pay such amounts to the Holders.

       

      (b)           The
Guarantor hereby also agrees to assume any and all Obligations of the Issuer and
in the event any such Obligation is not so assumed, subject to the terms and
conditions hereof, the Guarantor hereby irrevocably and unconditionally
guarantees to each Beneficiary the full payment, when and as due, of any and all
Obligations to such Beneficiaries.  This Guarantee is intended to be
for the benefit of, and to be enforceable by, all such Beneficiaries, whether or
not such Beneficiaries have received notice hereof.

      
        
           

        

        
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      Section
4.2     Waiver of Notice and
Demand.

       

      The
Guarantor hereby waives notice of acceptance of this 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, the Company 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
4.3     Obligations Not
Affected.

       

      The
obligations, covenants, agreements and duties of the Guarantor under this
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, (i) by the Issuer of any express or implied agreement, covenant,
term or condition relating to the Capital Securities to be performed or observed
by the Issuer, or (ii) by the Company of any express or implied agreement,
covenant, term or condition relating to the Company Guarantee to be performed or
observed by the Company;

       

      (b)           the
extension of time for the payment by the Issuer of all or any portion of the
Distributions, Optional Redemption Price, Special Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Capital Securities
or the extension of time for the performance of any other obligation under,
arising out of or in connection with, the Capital Securities (other than an
extension of time for payment of Distributions, Optional Redemption Price,
Special Redemption Price, Liquidation Distribution or other sum payable that
results from the extension of any interest payment period on the Debentures or
any extension of the maturity date of the Debentures permitted by the
Indenture), or the extension of time for payment by the Company of all or any
portion of the obligations of the Company under the Company
Guarantee;

       

      (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 Capital Securities or the Company
Guarantee, or any action on the part of the Issuer or the Company 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 the Company or any of the assets of
the Issuer or the Company;

       

      (e)           any
invalidity of, or defect or deficiency in, the Capital Securities, the
Indenture, the Debentures or the Company Guarantee;

       

      (f)           the
settlement or compromise of any obligation guaranteed hereby or hereby incurred;
or

       

      (g)           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 4.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.

      
        
           

        

        
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      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
4.4     Rights of
Holders.

       

      (a)           The
Holders of a Majority in liquidation amount of the Capital 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 Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under this Guarantee; provided, however, that
(subject to Section 2.1) the Guarantee Trustee shall have the right to
decline to follow any such direction if the Guarantee Trustee being advised by
counsel determines that the action or proceeding so directed may not lawfully be
taken or if the Guarantee Trustee in good faith by its board of directors or
trustees, executive committees or a trust committee of directors or trustees
and/or Responsible Officers shall determine that the action or proceedings so
directed would involve the Guarantee Trustee in personal liability.

       

      (b)           Any
Holder of Capital Securities may institute a legal proceeding directly against
the Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee,
without first instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other Person.  The Guarantor waives any right or remedy
to require that any such action be brought first against the Issuer, the
Company, the Guarantee Trustee or any other Person before so proceeding directly
against the Guarantor.

       

      Section
4.5     Guarantee of
Payment.

       

      This
Guarantee creates a guarantee of payment and not of collection.

       

      Section
4.6     Subrogation.

       

      The
Guarantor shall be subrogated to all (if any) rights of the Holders of Capital
Securities against the Issuer and the Company in respect of any amounts paid to
such Holders by the Guarantor under this Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by applicable 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 Guarantee, if, after giving effect to any such
payment, any amounts are due and unpaid under this 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
4.7     Independent
Obligations.

       

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

      
        
           

        

        
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      Section
4.8     Enforcement by a
Beneficiary.

       

      A
Beneficiary may enforce the obligations of the Guarantor contained in Section
4.1(b) directly against the Guarantor and the Guarantor waives any right or
remedy to require that any action be brought against the Issuer, the Company or
any other person or entity before proceeding against the
Guarantor.  The Guarantor shall be subrogated to all rights (if any)
of any Beneficiary against the Issuer and the Company in respect of any amounts
paid to the Beneficiaries by the Guarantor under this 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 rights 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 Guarantee, if at the time of any such payment,
and after giving effect to such payment, any amounts are due and unpaid under
this Guarantee.

       

      ARTICLE
V

       

      SUBORDINATION

       

      Section
5.1     Limitation of
Transactions.

       

      So long
as any Capital Securities remain outstanding or, if the Debentures have been
distributed to the Holders of Capital Securities, so long as any Debentures
remain outstanding, if (a) there shall have occurred and be continuing an
Event of Default or a Declaration Event of Default or (b) the dollar amount of
the Guarantor’s premium volume from insurance policies in any calendar year
fails to exceed 51% of the Guarantor’s premium volume from insurance policies in
the previous calendar year, (c) the Guarantor sells more than 51% of its rights
to renew insurance policies in any single transaction or series of related
transactions, (d) any Significant Subsidiary (as defined in Section 1-02(w)
of Regulation S-X to the Securities Act (the “Significant
Subsidiaries”)) of the Guarantor which is rated by A.M. Best Company,
Inc. (x) receives a rating from A.M. Best Company, Inc. of B- or lower; or (y)
submits a request to withdraw its rating by A.M. Best Company, Inc., (e) the
Company shall have selected an Extension Period as provided in the Declaration
and such period, or any extension thereof, shall have commenced and be
continuing, then the Guarantor shall not and shall not permit any Affiliate of
the Guarantor controlled by the Guarantor to (x) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Guarantor’s or such Affiliate’s
capital stock (other than payments of dividends or distributions to the
Guarantor or a Subsidiary of the Guarantor) or make any guarantee payments with
respect to the foregoing; (y) make any payment of principal of or interest
or premium, if any, on or repay, repurchase or redeem any debt securities of the
Guarantor or any Affiliate of the Guarantor controlled by the Guarantor that
rank pari passu in all
respects with or junior in interest to the Debentures; or (z) enter into any
contracts with shareholders holding more than 10% of the outstanding shares of
common stock of the Guarantor that could require cash payments by the Guarantor
to such shareholder (other than, with respect to clauses (x) and (y) above,
(i) repurchases, redemptions or other acquisitions of shares of capital
stock of the Guarantor or any Subsidiary 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 of such
Subsidiary (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, Declaration Event of Default or Extension
Period, as applicable, (ii) as a result of any exchange or conversion of
any class or series of the Guarantor’s capital stock (or any capital stock of a
Subsidiary of the Guarantor) for any class or series of the Guarantor’s capital
stock (or in the case of a Subsidiary of the Guarantor, any class or series of
such Subsidiary’s capital stock) or of any class or series of the Guarantor’s
indebtedness for any class or series of the Guarantor’s capital stock (or in the
case of indebtedness of a Subsidiary of the Guarantor, of any class or series of
such Subsidiary’s indebtedness for any class or series of such Subsidiary’s
capital stock), (iii) the purchase of fractional interests in shares of the
Guarantor’s capital stock (or the capital stock of a Subsidiary of the
Guarantor) pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (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, (v) any dividend in
the form of stock, warrants, options or other rights where the dividend stock or
the stock issuable upon exercise of such warrants, options or other rights is
the same stock as that on which the dividend is being paid or ranks pari passu with or junior to
such stock and any cash payments in lieu of fractional shares issued in
connection therewith, or (vi) payments under this
Guarantee).

      
        
           

        

        
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      Section
5.2     Ranking.

       

      This
Guarantee will constitute an unsecured obligation of the Guarantor and will rank
subordinate and junior in right of payment to all present and future Senior
Indebtedness of the Guarantor.  By their acceptance thereof, each
Holder of Capital Securities agrees to the foregoing provisions of this
Guarantee and the other terms set forth herein.

       

      The right
of the Guarantor to participate in any distribution of assets of any of its
Subsidiaries upon any such Subsidiary’s liquidation or reorganization or
otherwise is subject to the prior claims of creditors of that Subsidiary, except
to the extent the Guarantor may itself be recognized as a creditor of that
Subsidiary.  Accordingly, the Guarantor’s obligations under this
Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor’s Subsidiaries, and claimants should look only to
the assets of the Guarantor for payments hereunder.  This Guarantee
does not limit the incurrence or issuance of other secured or unsecured debt of
the Guarantor, including Senior Indebtedness of the Guarantor, under any
indenture that the Guarantor may enter into in the future or
otherwise.

       

      
        
           

        

        
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      ARTICLE
VI

       

      TERMINATION

       

      Section
6.1     Termination.

       

      This
Guarantee shall terminate (subject to the remaining provisions of this Section
6.1) as to the Capital Securities (i) upon full payment of the Optional
Redemption Price or Special Redemption Price of all Capital Securities then
outstanding, or (ii) upon the distribution of all of the Debentures to the
Holders of all of the Capital Securities.  This Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Capital Securities must restore payment of any sums paid
under the Capital Securities or under this
Guarantee..  Notwithstanding the foregoing, in the case the Debentures
are distributed to the holders of Capital Securities, this Guarantee will
continue as to the obligations hereunder with respect to the Indenture and the
Debentures until all such obligations have been discharged.

       

      ARTICLE
VII

       

      INDEMNIFICATION

       

      Section
7.1     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 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 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 Issuer, the Company or the Guarantor and upon such information,
opinions, reports or statements presented to the Issuer, the Company or 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, if
selected by such Indemnified Person, has been selected with reasonable care by
such Indemnified Person, 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 of Capital Securities might properly be
paid.

       

      Section
7.2     Indemnification.

       

      (a)           The
Guarantor agrees to indemnify each Indemnified Person for, and to hold each
Indemnified Person harmless against, any and all loss, liability, damage, claim
or expense incurred without negligence or willful misconduct on the part of the
Indemnified Person, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including, but not limited to,
the costs and expenses (including reasonable legal fees and expenses) of the
Indemnified Person defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of the
Indemnified Person’s powers or duties hereunder.  The obligation to
indemnify as set forth in this Section 7.2 shall survive the resignation or
removal of the Guarantee Trustee and the termination of this
Guarantee.

      
        
           

        

        
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      (b)           Promptly
after receipt by an Indemnified Person under this Section 7.2 of notice of
the commencement of any action, such Indemnified Person will, if a claim in
respect thereof is to be made against the Guarantor under this Section 7.2,
notify the Guarantor in writing of the commencement thereof; but the failure so
to notify the Guarantor (i) will not relieve the Guarantor from liability
under paragraph (a) above unless and to the extent that the Guarantor did
not otherwise learn of such action and such failure results in the forfeiture by
the Guarantor of substantial rights and defenses and (ii) will not, in any
event, relieve the Guarantor from any obligations to any Indemnified Person
other than the indemnification obligation provided in paragraph (a)
above.  The Guarantor shall be entitled to appoint counsel of the
Guarantor’s choice at the Guarantor’s expense to represent the Indemnified
Person in any action for which indemnification is sought (in which case the
Guarantor shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the Indemnified Person or Persons except as set
forth below); provided, however, that such
counsel shall be reasonably
satisfactory to the Indemnified Person.  Notwithstanding the
Guarantor’s election to appoint counsel to represent the Guarantor in an action,
the Indemnified Person shall have the right to employ separate counsel
(including local counsel), and the Guarantor shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of counsel
chosen by the Guarantor to represent the Indemnified Person would present such
counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the Indemnified
Person and the Guarantor and the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it and/or other
Indemnified Person(s) which are different from or additional to those available
to the Guarantor, (iii) the Guarantor shall not have employed counsel
satisfactory to the Indemnified Person to represent the Indemnified Person
within a reasonable time after notice of the institution of such action or
(iv) the Guarantor shall authorize the Indemnified Person to employ
separate counsel at the expense of the Guarantor.  The Guarantor will
not, without the prior written consent of the Indemnified Persons, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Persons are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Person from all liability arising out of such claim, action,
suit or proceeding.

       

      Section
7.3     Compensation; Reimbursement
of Expenses.

       

      The
Guarantor agrees:

       

      (a)           to
pay to the Guarantee Trustee from time to time such compensation for all
services rendered by it hereunder as the parties shall agree to from time to
time (which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust); and

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

       

      (b)           except
as otherwise expressly provided herein, to reimburse the Guarantee Trustee upon
request for all reasonable expenses, disbursements and advances incurred or made
by it in accordance with any provision of this Guarantee (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or willful misconduct.

       

      ARTICLE
VIII

       

      MISCELLANEOUS

       

      Section
8.1     Successors and
Assigns.

       

      All
guarantees and agreements contained in this Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Capital Securities then
outstanding.  The Guarantor may not assign its rights or delegate its
obligations under this Guarantee without the prior approval of the Holders of at
least a Majority in liquidation amount of the Capital Securities and the Holders
of at least a Majority in liquidation amount of the Capital Securities that are
not Founders.

       

      Section
8.2     Amendments.

       

      Except
with respect to any changes that do not adversely affect the rights of Holders
of the Capital Securities in any material respect (in which case no consent of
Holders will be required), this Guarantee may be amended only with the prior
approval of the Holders of not less than a Majority in liquidation amount of the
Capital Securities and the Guarantor.  The provisions of the
Declaration with respect to amendments thereof apply to the giving of such
approval.

       

      Section
8.3     Notices.

       

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

       

      (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 of the Capital Securities and the Guarantor):

       

      Wilmington
Trust Company

      1100
North Market Street

      Wilmington,
Delaware 19890-1600

      Attention:
Corporate Trust Administration

      Telecopy:  302-636-4140

       

      (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 of the
Capital Securities and to the Guarantee Trustee):

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

       

      Maiden
Holdings, Ltd.

      48
Par-la-Ville Road, Suite 1141

      Hamilton
HM11

      Bermuda

      Attention:
Michael Tait

      Telecopy:
(441) 292-0471

       

      (c)           If
given to any Holder of the Capital Securities, 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
8.4     Benefit.

       

      This
Guarantee is solely for the benefit of the Beneficiaries and, subject to Section
2.1(a), is not separately transferable from the Capital Securities.

       

      Section
8.5     Governing
Law.

       

      PURSUANT
TO SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, THIS
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

       

      Section
8.6     Counterparts.

       

      This
Guarantee may be executed in one or more counterparts, each of which shall be an
original, but all of which taken together shall constitute one and the same
instrument.

       

      Section
8.7     Separability.

       

      In case
one or more of the provisions contained in this Guarantee shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Guarantee, but this Guarantee shall be construed as if such invalid or illegal
or unenforceable provision had never been contained herein.

       

      Signatures
appear on the following page

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

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

       

      
        
          	
                  MAIDEN
      HOLDINGS, LTD.,

                
	
                  as
      Guarantor

                
	 
      	 
      
	
                  By:

                	
                  /s/ Michael
      Tait  

                
	 
      	
                  Name:
      Michael Tait

                
	 
      	
                  Title:  
      Chief Financial
    Officer

                
	 
      	 
      
	
                  WILMINGTON TRUST
      COMPANY, as

                  Guarantee
      Trustee

                
	 
      	 
      
	
                  By:

                	
                  /s/ Christopher J.
      Slaybaugh  

                
	 
      	
                  Name:
      Christopher J.
      Slaybaugh

                
	 
      	
                  Title:  
      Assistant Vice
      President

                

        

      

      
        
           

        

        
          20GUARANTEE
AGREEMENT

    

     

    by
and between

     

    MAIDEN
HOLDINGS NORTH AMERICA, LTD.

     

    and

     

    WILMINGTON
TRUST COMPANY

     

    Dated
as of January 20, 2009

     

    
      

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE OF
CONTENTS

     

    
      
        
          
            	 
      	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      I

                  	
                    DEFINITIONS
      AND INTERPRETATION

                  	 
      	
                    1

                  
	
                    Section
      1.1

                  	
                    Definitions
      and Interpretation

                  	 
      	
                    1

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      II

                  	
                    POWERS,
      DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

                  	 
      	
                    5

                  
	
                    Section
      2.1

                  	
                    Powers
      and Duties of the Guarantee Trustee

                  	 
      	
                    5

                  
	
                    Section
      2.2

                  	
                    Certain
      Rights of the Guarantee Trustee

                  	 
      	
                    6

                  
	
                    Section
      2.3

                  	
                    Not
      Responsible for Recitals or Issuance of Guarantee

                  	 
      	
                    8

                  
	
                    Section
      2.4

                  	
                    Events
      of Default; Waiver

                  	 
      	
                    8

                  
	
                    Section
      2.5

                  	
                    Events
      of Default; Notice

                  	 
      	
                    8

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      III

                  	
                    GUARANTEE
      TRUSTEE

                  	 
      	
                    9

                  
	
                    Section
      3.1

                  	
                    Guarantee
      Trustee; Eligibility

                  	 
      	
                    9

                  
	
                    Section
      3.2

                  	
                    Appointment,
      Removal and Resignation of the Guarantee Trustee

                  	 
      	
                    9

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      IV

                  	
                    GUARANTEE

                  	 
      	
                    10

                  
	
                    Section
      4.1

                  	
                    Guarantee

                  	 
      	
                    10

                  
	
                    Section
      4.2

                  	
                    Waiver
      of Notice and Demand

                  	 
      	
                    10

                  
	
                    Section
      4.3

                  	
                    Obligations
      Not Affected

                  	 
      	
                    10

                  
	
                    Section
      4.4

                  	
                    Rights
      of Holders

                  	 
      	
                    11

                  
	
                    Section
      4.5

                  	
                    Guarantee
      of Payment

                  	 
      	
                    12

                  
	
                    Section
      4.6

                  	
                    Subrogation

                  	 
      	
                    12

                  
	
                    Section
      4.7

                  	
                    Independent
      Obligations

                  	 
      	
                    12

                  
	
                    Section
      4.8

                  	
                    Enforcement
      by a Beneficiary

                  	 
      	
                    12

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      V

                  	
                    LIMITATION
      OF TRANSACTIONS; SUBORDINATION

                  	 
      	
                    13

                  
	
                    Section
      5.1

                  	
                    Limitation
      of Transactions

                  	 
      	
                    13

                  
	
                    Section
      5.2

                  	
                    Ranking

                  	 
      	
                    14

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      VI

                  	
                    TERMINATION

                  	 
      	
                    14

                  
	
                    Section
      6.1

                  	
                    Termination

                  	 
      	
                    14

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      VII

                  	
                    INDEMNIFICATION

                  	 
      	
                    15

                  
	
                    Section
      7.1

                  	
                    Exculpation

                  	 
      	
                    15

                  
	
                    Section
      7.2

                  	
                    Indemnification

                  	 
      	
                    15

                  
	
                    Section
      7.3

                  	
                    Compensation;
      Reimbursement of Expenses

                  	 
      	
                    16

                  
	 
      	 
      	 
      	 
      
	
                    ARTICLE
      VIII

                  	
                    MISCELLANEOUS

                  	 
      	
                    17

                  
	
                    Section
      8.1

                  	
                    Successors
      and Assigns

                  	 
      	
                    17

                  
	
                    Section
      8.2

                  	
                    Amendments

                  	 
      	
                    17

                  
	
                    Section
      8.3

                  	
                    Notices

                  	 
      	
                    17

                  
	
                    Section
      8.4

                  	
                    Benefit

                  	 
      	
                    18

                  

          

        

      

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            	
                    Section
      8.5

                  	
                    Governing
      Law

                  	 
      	
                    18

                  
	
                    Section
      8.6

                  	
                    Counterparts

                  	 
      	
                    18

                  
	
                    Section
      8.7

                  	
                    Separability

                  	 
      	
                    18

                  

          

        

      

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    GUARANTEE
AGREEMENT

     

    This
GUARANTEE AGREEMENT (this “Guarantee”), dated as
of January 20, 2009, is executed and delivered by Maiden Holdings North America,
Ltd., a Delaware corporation (the “Guarantor”), and
Wilmington Trust Company, a Delaware banking corporation, as trustee (the “Guarantee Trustee”),
for the benefit of the Holders (as defined herein) from time to time of the
Capital Securities (as defined herein) of Maiden Capital Financing Trust, a
Delaware statutory trust (the “Issuer”).

     

    WHEREAS,
pursuant to an Amended and Restated Declaration of Trust (the “Declaration”), dated
as of the date hereof among Wilmington Trust Company, not in its individual
capacity but solely as institutional trustee, the administrators of the Issuer
named therein, the Guarantor, as sponsor, 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 those undivided beneficial interests, having an
aggregate liquidation amount of $260,000,000.00 (the “Capital Securities”);
and

     

    WHEREAS,
as incentive for the Holders to purchase the Capital Securities, the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth in
this Guarantee, to pay to the Holders of Capital Securities 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 the Capital
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the Holders.

     

    ARTICLE
I

    

    DEFINITIONS
AND INTERPRETATION

     

    Section 1.1 
  Definitions and
Interpretation.

     

    In this
Guarantee, unless the context otherwise requires:

     

    (a)           capitalized
terms used in this 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 Guarantee has the same meaning
throughout;

     

    (c)           all
references to “the Guarantee” or “this Guarantee” are to this Guarantee as
modified, supplemented or amended from time to time;

     

    (d)           all
references in this Guarantee to “Articles” or “Sections” are to Articles or
Sections of this Guarantee, unless otherwise specified;

     

    (e)           terms
defined in the Declaration as at the date of execution of this Guarantee have
the same meanings when used in this Guarantee, unless otherwise defined in this
Guarantee or unless the context otherwise requires; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    “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.

     

    “Beneficiaries” means
any Person to whom the Issuer is or hereafter becomes indebted or
liable.

     

    “Capital Securities”
has the meaning set forth in the recitals to this Guarantee.

     

    “Common Securities”
means the common securities issued by the Issuer to the Guarantor pursuant to
the Declaration.

     

    “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
Guarantee is located at 1100 North Market Street, Wilmington, Delaware
19890-1600, Attention: Corporate Trust Administration.

     

    “Covered Person” means
any Holder of Capital Securities.

     

    “Debentures” means the
debt securities of the Guarantor designated the Fixed Rate Junior Subordinated
Deferrable Interest Debentures due 2039 held by the Institutional Trustee (as
defined in the Declaration) of the Issuer.

     

    “Declaration Event of
Default” means an “Event of Default” as defined in the
Declaration.

     

    “Event of Default” has
the meaning set forth in Section 2.4(a).

     

    “Founders” means
George Karfunkel, Michael Karfunkel, any of their respective Affiliates and any
of their charitable or family trusts.

     

    “Guarantee Payments”
means the following payments or distributions, without duplication, with respect
to the Capital Securities, to the extent not paid or made by the
Issuer:  (i) any accrued and unpaid Distributions (as defined in
the Declaration) which are required to be paid on such Capital Securities
to the extent the Issuer shall have funds available therefor, (ii) the
Optional Redemption Price to the extent the Issuer has funds available therefor,
with respect to any Capital Securities called for redemption by the Issuer,
(iii) the Special Redemption Price to the extent the Issuer has funds
available therefor, with respect to Capital Securities redeemed upon the
occurrence of a Special Event, (iv) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders of the Capital
Securities in exchange therefor as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the “Liquidation
Distribution”), and (v) the Change of Control Purchase Price (as
defined in the Declaration) to the extent the Issuer has funds available
therefor which is required to be paid with respect to any Capital Securities in
connection with a Change of Control (as defined in the Indenture).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Guarantee Trustee”
means Wilmington Trust Company, until a Successor Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Guarantee and thereafter means each such Successor Guarantee
Trustee.

     

    “Guarantor” means
Maiden Holdings North America, Ltd. and each of its successors and
assigns.

     

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

     

    “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 the date hereof between the Guarantor and Wilmington Trust
Company, not in its individual capacity but solely as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
institutional trustee of the Issuer.

     

    “Issuer” has the
meaning set forth in the opening paragraph to this Guarantee.

     

    “Liquidation
Distribution” has the meaning set forth in the definition of “Guarantee
Payments” herein.

     

    “Majority in liquidation
amount of the Capital Securities” means Holder(s) of outstanding Capital
Securities, voting together as a class, but separately from the holders of
Common Securities, of 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 Capital Securities then
outstanding.

     

    “Obligations” means
any costs, expenses or liabilities (but not including liabilities related to
taxes) of the Issuer other than obligations of the Issuer to pay to holders of
any Trust Securities the amounts due such holders pursuant to the terms of the
Trust Securities.

     

    “Officer’s
Certificate” means, with respect to any Person, a certificate signed by
one Authorized Officer of such Person. Any Officer’s Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee shall include:

     

    (a)           a
statement that the officer signing the Officer’s Certificate has read the
covenant or condition and the definitions relating thereto;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b)           a
brief statement of the nature and scope of the examination or investigation
undertaken by the officer in rendering the Officer’s Certificate;

     

    (c)           a
statement that the 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

     

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

     

    “Optional Redemption
Price” has the meaning set forth in the Indenture.

     

    “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.

     

    “Responsible Officer”
means, with respect to the Guarantee Trustee, any officer within the Corporate
Trust Office of the Guarantee Trustee including any Vice President, Assistant
Vice President, Secretary, Assistant Secretary or any other officer of the
Guarantee Trustee customarily performing functions similar to those performed by
any of the above designated officers and also, 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.

     

    “Special Event” has
the meaning set forth in the Indenture.

     

    “Special Redemption
Price” has the meaning set forth in the Indenture.

     

    “Subsidiary”  means
with respect to any Person, (i) any corporation at least a majority of the
outstanding voting stock of which is owned, directly or indirectly, by such
Person or by one or more of its Subsidiaries, or by such Person and one or more
of its Subsidiaries, (ii) any general partnership, joint venture or similar
entity, at least a majority of the outstanding partnership or similar interests
of which shall at the time be owned by such Person, or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii)
any limited partnership of which such Person or any of its Subsidiaries is a
general partner.  For the purposes of this definition, “voting stock”
means shares, interests, participations or other equivalents in the equity
interest (however designated) in such Person having ordinary voting power for
the election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.

     

    “Successor Guarantee
Trustee” means a successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 3.1.

     

    “Trust Securities”
means the Common Securities and the Capital Securities.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    ARTICLE
II

     

    POWERS,
DUTIES AND RIGHTS OF THE

    GUARANTEE
TRUSTEE

     

    Section
2.1    Powers and Duties of the
Guarantee Trustee.

     

    (a)           This
Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders
of the Capital Securities, and the Guarantee Trustee shall not transfer this
Guarantee to any Person except a Holder of Capital Securities exercising his or
her rights pursuant to Section 4.4(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,
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
Guarantee for the benefit of the Holders of the Capital Securities.

     

    (c)           The
Guarantee Trustee, before the occurrence of any Event of Default and after the
curing or waiving of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee, and no implied covenants shall be read into this Guarantee against
the Guarantee Trustee.  In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.4) 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 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 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 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 Guarantee, and no implied covenants or
obligations shall be read into this 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 conforming to the requirements of this
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 conform to the requirements of this
Guarantee;

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (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 such Responsible Officer of the Guarantee Trustee or 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 written direction
of the Holders of not less than a Majority in liquidation amount of the Capital
Securities relating to the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee, or relating to the exercise
of any trust or power conferred upon the Guarantee Trustee under this Guarantee;
and

     

    (iv)           no
provision of this 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 Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds is not reasonably assured to it under the terms
of this Guarantee or security and indemnity, reasonably satisfactory to the
Guarantee Trustee, against such risk or liability is not reasonably assured to
it.

     

    Section
2.2    Certain Rights of the
Guarantee Trustee.

     

    (a)           Subject
to the provisions of Section 2.1:

     

    (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 Guarantee shall be
sufficiently evidenced by an Officer’s Certificate.

     

    (iii)           Whenever,
in the administration of this 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 Officer’s Certificate of the Guarantor
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 re-recording, refiling or re-registration
thereof).

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (v)           The
Guarantee Trustee may consult with counsel of its selection, and the 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
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 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, however, that nothing
contained in this Section 2.2(a)(vi) shall 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 Guarantee.

     

    (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 Capital 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 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 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 Capital
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.

     

    
      
        
        

      

      
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    (xi)           The
Guarantee Trustee shall not be liable for any action taken, suffered, or omitted
to be taken by it in good faith, without negligence, and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Guarantee.

     

    (b)           No
provision of this 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.

     

    Section
2.3    Not Responsible for Recitals
or Issuance of Guarantee.

     

    The
recitals contained in this 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 Guarantee.

     

    Section
2.4    Events of Default;
Waiver.

     

    (a)           An
Event of Default under this Guarantee will occur upon the failure of the
Guarantor to perform any of its payment or other obligations
hereunder.

     

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

     

    Section
2.5    Events of Default;
Notice.

     

    (a)           The
Guarantee Trustee shall, within 90 days after the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders of the
Capital Securities and the Guarantor, notices of all Events of Default actually
known to a Responsible Officer of the Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, however, 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 of the Capital
Securities.

     

    (b)           The
Guarantee Trustee shall not be deemed to have knowledge of any Event of Default
unless the Guarantee Trustee shall have received written notice from the
Guarantor or a Holder of the Capital Securities (except in the case of a payment
default), or a Responsible Officer of the Guarantee Trustee charged with the
administration of this Guarantee shall have obtained actual knowledge
thereof.

     

    
      
        
        

      

      
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    ARTICLE
III

     

    GUARANTEE
TRUSTEE

     

    Section
3.1    Guarantee Trustee;
Eligibility.

     

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

     

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

     

    (ii)           be
a banking corporation or national association 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 Person authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least fifty
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 or national association 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 3.1(a)(ii),
the combined capital and surplus of such corporation or national association
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 3.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set forth in Section 3.2(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
shall either eliminate such interest or resign to the extent and in the manner
provided by, and subject to this Guarantee.

     

    Section
3.2    Appointment, Removal and
Resignation of the Guarantee Trustee.

     

    (a)           Subject
to Section 3.2(b), the Guarantee Trustee may be appointed or removed without
cause at any time by the Guarantor except during an Event of
Default.

     

    (b)           The
Guarantee Trustee shall not be removed in accordance with Section 3.2(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 (without
need for prior or subsequent accounting) 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 an instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

     

    
      
        
        

      

      
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    (d)           If
no Successor Guarantee Trustee shall have been appointed and accepted
appointment as provided in this Section 3.2 within 60 days after
delivery of an instrument of removal or resignation, the Guarantee Trustee
resigning or being removed may petition 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.

     

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

     

    (f)           Upon
termination of this Guarantee or removal or resignation of the Guarantee Trustee
pursuant to this Section 3.2, the Guarantor shall pay to the Guarantee Trustee
all amounts owing to the Guarantee Trustee under Sections 7.2 and 7.3
accrued to the date of such termination, removal or resignation.

     

    ARTICLE
IV

     

    GUARANTEE

     

    Section
4.1    Guarantee.

     

    (a)           The
Guarantor irrevocably and unconditionally agrees to pay in full to the Holders
the Guarantee Payments (without duplication of amounts theretofore paid by the
Issuer), as and when due, regardless of any defense (except the defense of
payment by the Issuer), 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 by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.

     

    (b)           The
Guarantor hereby also agrees to assume any and all Obligations of the Issuer and
in the event any such Obligation is not so assumed, subject to the terms and
conditions hereof, the Guarantor hereby irrevocably and unconditionally
guarantees to each Beneficiary the full payment, when and as due, of any and all
Obligations to such Beneficiaries.  This Guarantee is intended to be
for the benefit of, and to be enforceable by, all such Beneficiaries, whether or
not such Beneficiaries have received notice hereof.

     

    Section
4.2    Waiver of Notice and
Demand.

     

    The
Guarantor hereby waives notice of acceptance of this 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
4.3    Obligations Not
Affected.

     

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

     

    
      
        
        

      

      
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    (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 Capital 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, Optional Redemption Price, Special Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Capital Securities
or the extension of time for the performance of any other obligation under,
arising out of or in connection with, the Capital Securities (other than an
extension of time for payment of Distributions, Optional Redemption Price,
Special Redemption Price, Liquidation Distribution or other sum payable that
results from the extension of any interest payment period on the Debentures or
any extension of the maturity date of the Debentures 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 Capital 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 Capital Securities;

     

    (f)           the
settlement or compromise of any obligation guaranteed hereby or hereby incurred;
or

     

    (g)           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 4.3 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
4.4    Rights of
Holders.

     

    (a)           The
Holders of a Majority in liquidation amount of the Capital 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 Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under this Guarantee; provided, however, that
(subject to Section 2.1) the Guarantee Trustee shall have the right to
decline to follow any such direction if the Guarantee Trustee being advised by
counsel determines that the action or proceeding so directed may not lawfully be
taken or if the Guarantee Trustee in good faith by its board of directors or
trustees, executive committees or a trust committee of directors or trustees
and/or Responsible Officers shall determine that the action or proceedings so
directed would involve the Guarantee Trustee in personal liability.

     

    
      
        
        

      

      
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    (b)           Any
Holder of Capital Securities may institute a legal proceeding directly against
the Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee,
without first instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other Person.  The Guarantor waives any right or remedy
to require that any such action be brought first against the Issuer, the
Guarantee Trustee or any other Person before so proceeding directly against the
Guarantor.

     

    Section
4.5    Guarantee of
Payment.

     

    This
Guarantee creates a guarantee of payment and not of collection.

     

    Section
4.6    Subrogation.

     

    The
Guarantor shall be subrogated to all (if any) rights of the Holders of Capital
Securities against the Issuer in respect of any amounts paid to such Holders by
the Guarantor under this Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by applicable 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 Guarantee, if, after giving effect to any such
payment, any amounts are due and unpaid under this 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
4.7    Independent
Obligations.

     

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

     

    Section
4.8    Enforcement by a
Beneficiary.

     

    A
Beneficiary may enforce the obligations of the Guarantor contained in Section
4.1(b) directly against the Guarantor and the Guarantor waives any right or
remedy to require that any action be brought against the Issuer or any other
person or entity before proceeding against the Guarantor.  The
Guarantor shall be subrogated to all rights (if any) of any Beneficiary against
the Issuer in respect of any amounts paid to the Beneficiaries by the Guarantor
under this 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 rights 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 Guarantee, if at the time of any such payment,
and after giving effect to such payment, any amounts are due and unpaid under
this Guarantee.

     

    
      
        
        

      

      
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    ARTICLE
V

     

    LIMITATION
OF TRANSACTIONS; SUBORDINATION

     

    Section
5.1    Limitation of
Transactions.

     

    So long
as any Capital Securities remain outstanding, if (a) there shall have
occurred and be continuing an Event of Default or a Declaration Event of Default
or (b) the dollar amount of the Guarantor’s premium volume from insurance
policies in any calendar year fails to exceed 51% of the Guarantor’s premium
volume from insurance policies in the previous calendar year, (c) the Guarantor
sells more than 51% of its rights to renew insurance policies in any single
transaction or series of related transactions, (d) any Significant Subsidiary
(as defined in Section 1-02(w) of Regulation S-X to the Securities Act (the
“Significant
Subsidiaries”)) of the Guarantor which is rated by A.M. Best Company,
Inc. (x) receives a rating from A.M. Best Guarantor Inc. of B- or lower; or (y)
submits a request to withdraw its rating by A.M. Best Guarantor, Inc., (e) the
Guarantor shall have selected an Extension Period as provided in the Declaration
and such period, or any extension thereof, shall have commenced and be
continuing, then the Guarantor shall not and shall not permit any Affiliate of
the Guarantor controlled by the Guarantor to (x) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Guarantor’s or such Affiliate’s
capital stock (other than payments of dividends or distributions to the
Guarantor or a Subsidiary of the Guarantor) or make any guarantee payments with
respect to the foregoing; (y) make any payment of principal of or interest
or premium, if any, on or repay, repurchase or redeem any debt securities of the
Guarantor or any Affiliate of the Guarantor controlled by the Guarantor that
rank pari passu in all
respects with or junior in interest to the Debentures; or (z) enter into any
contracts with shareholders holding more than 10% of the outstanding shares of
common stock of the Guarantor that could require cash payments by the Guarantor
to such shareholder (other than, with respect to clauses (x) and (y) above,
(i) repurchases, redemptions or other acquisitions of shares of capital
stock of the Guarantor or any Subsidiary 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 of such
Subsidiary (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, Declaration Event of Default or Extension
Period, as applicable, (ii) as a result of any exchange or conversion of
any class or series of the Guarantor’s capital stock (or any capital stock of a
Subsidiary of the Guarantor) for any class or series of the Guarantor’s capital
stock (or in the case of a Subsidiary of the Guarantor, any class or series of
such Subsidiary’s capital stock) or of any class or series of the Guarantor’s
indebtedness for any class or series of the Guarantor’s capital stock (or in the
case of indebtedness of a Subsidiary of the Guarantor, of any class or series of
such Subsidiary’s indebtedness for any class or series of such Subsidiary’s
capital stock), (iii) the purchase of fractional interests in shares of the
Guarantor’s capital stock (or the capital stock of a Subsidiary of the
Guarantor) pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (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, (v) any dividend in
the form of stock, warrants, options or other rights where the dividend stock or
the stock issuable upon exercise of such warrants, options or other rights is
the same stock as that on which the dividend is being paid or ranks pari passu with or junior to
such stock and any cash payments in lieu of fractional shares issued in
connection therewith, or (vi) payments under this Guarantee; and other
than, with respect to clause (z) above, (I) any reinsurance or other risk
transfer, producer, intermediary, claims management, underwriting, investment
management, administrative or services agreement between (A) an insurance
company Affiliate of the Guarantor and (B) Maiden Holdings, Ltd., a company
organized under the laws of Bermuda (“Maiden BDA”), or one
of its subsidiaries that is not a subsidiary of the Guarantor (a "Maiden BDA Company"),
so long as such agreement has been approved or is permitted as an agreement with
an affiliate by the governmental authority that regulates insurance companies in
the jurisdiction in which such insurance company subsidiary of the Guarantor is
domiciled or the laws of such domiciliary jurisdiction, or (II) any producer,
intermediary, claims management, underwriting, investment management,
administrative or services agreement between (I) the Guarantor or one of its
non-insurance company Affiliates and (II) a Maiden BDA Company, so long as such
agreement is on terms no less favorable to the Guarantor or its non-insurance
company Affiliate than arm’s-length terms.).

     

    
      
        
        

      

      
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    Section
5.2    Ranking.

     

    This
Guarantee will constitute an unsecured obligation of the Guarantor and will rank
subordinate and junior in right of payment to all present and future Senior
Indebtedness (as defined in the Indenture) of the Guarantor.  By their
acceptance thereof, each Holder of Capital Securities agrees to the foregoing
provisions of this Guarantee and the other terms set forth herein.

     

    The right
of the Guarantor to participate in any distribution of assets of any of its
Subsidiaries upon any such Subsidiary’s liquidation or reorganization or
otherwise is subject to the prior claims of creditors of that Subsidiary, except
to the extent the Guarantor may itself be recognized as a creditor of that
Subsidiary.  Accordingly, the Guarantor’s obligations under this
Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor’s Subsidiaries, and claimants should look only to
the assets of the Guarantor for payments hereunder.  This Guarantee
does not limit the incurrence or issuance of other secured or unsecured debt of
the Guarantor, including Senior Indebtedness of the Guarantor, under any
indenture that the Guarantor may enter into in the future or
otherwise.

     

    ARTICLE
VI

     

    TERMINATION

     

    Section
6.1    Termination.

     

    This
Guarantee shall terminate as to the Capital Securities (i) upon full
payment of the Optional Redemption Price or Special Redemption Price of all
Capital Securities then outstanding, (ii) upon the distribution of all of
the Debentures to the Holders of all of the Capital Securities or
(iii) upon full payment of the amounts payable in accordance with the
Declaration upon dissolution of the Issuer.  This Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Capital Securities must restore payment of any sums paid
under the Capital Securities or under this Guarantee.

     

    
      
        
        

      

      
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    ARTICLE
VII

     

    INDEMNIFICATION

     

    Section
7.1    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 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 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 Issuer or the Guarantor and upon such information, opinions,
reports or statements presented to the Issuer or 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, if selected by such
Indemnified Person, has been selected with reasonable care by such Indemnified
Person, 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 of Capital Securities might properly be paid.

     

    Section
7.2    Indemnification.

     

    (a)           The
Guarantor agrees to indemnify each Indemnified Person for, and to hold each
Indemnified Person harmless against, any and all loss, liability, damage, claim
or expense incurred without negligence or willful misconduct on the part of the
Indemnified Person, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including, but not limited to,
the costs and expenses (including reasonable legal fees and expenses) of the
Indemnified Person defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of the
Indemnified Person’s powers or duties hereunder.  The obligation to
indemnify as set forth in this Section 7.2 shall survive the resignation or
removal of the Guarantee Trustee and the termination of this
Guarantee.

     

    
      
        
        

      

      
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    (b)           Promptly
after receipt by an Indemnified Person under this Section 7.2 of notice of
the commencement of any action, such Indemnified Person will, if a claim in
respect thereof is to be made against the Guarantor under this Section 7.2,
notify the Guarantor in writing of the commencement thereof; but the failure so
to notify the Guarantor (i) will not relieve the Guarantor from liability
under paragraph (a) above unless and to the extent that the Guarantor did
not otherwise learn of such action and such failure results in the forfeiture by
the Guarantor of substantial rights and defenses and (ii) will not, in any
event, relieve the Guarantor from any obligations to any Indemnified Person
other than the indemnification obligation provided in paragraph (a)
above.  The Guarantor shall be entitled to appoint counsel of the
Guarantor’s choice at the Guarantor’s expense to represent the Indemnified
Person in any action for which indemnification is sought (in which case the
Guarantor shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the Indemnified Person or Persons except as set
forth below); provided, however, that such
counsel shall be reasonably
satisfactory to the Indemnified Person.  Notwithstanding the
Guarantor’s election to appoint counsel to represent the Guarantor in an action,
the Indemnified Person shall have the right to employ separate counsel
(including local counsel), and the Guarantor shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of counsel
chosen by the Guarantor to represent the Indemnified Person would present such
counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the Indemnified
Person and the Guarantor and the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it and/or other
Indemnified Person(s) which are different from or additional to those available
to the Guarantor, (iii) the Guarantor shall not have employed counsel
satisfactory to the Indemnified Person to represent the Indemnified Person
within a reasonable time after notice of the institution of such action or
(iv) the Guarantor shall authorize the Indemnified Person to employ
separate counsel at the expense of the Guarantor.  The Guarantor will
not, without the prior written consent of the Indemnified Persons, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Persons are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Person from all liability arising out of such claim, action,
suit or proceeding.

     

    Section
7.3    Compensation; Reimbursement
of Expenses.

     

    The
Guarantor agrees:

     

    (a)           to
pay to the Guarantee Trustee from time to time such compensation for all
services rendered by it hereunder as the parties shall agree to from time to
time (which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust); and

     

    (b)           except
as otherwise expressly provided herein, to reimburse the Guarantee Trustee upon
request for all reasonable expenses, disbursements and advances incurred or made
by it in accordance with any provision of this Guarantee (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or willful misconduct.

     

    
      
        
        

      

      
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    ARTICLE
VIII

     

    MISCELLANEOUS

     

    Section
8.1    Successors and
Assigns.

     

    All
guarantees and agreements contained in this Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Capital Securities then
outstanding.  Except in connection with any merger or consolidation of
the Guarantor with or into another entity or any sale, transfer or lease of the
Guarantor’s assets to another entity, in each case, to the extent permitted
under the Indenture, the Guarantor may not assign its rights or delegate its
obligations under this Guarantee without the prior approval of the Holders of at
least a Majority in liquidation amount of the Capital Securities and the Holders
of at least a Majority in liquidation amount of the Capital Securities that are
not Founders.

     

    Section
8.2    Amendments.

     

    Except
with respect to any changes that do not adversely affect the rights of Holders
of the Capital Securities in any material respect (in which case no consent of
Holders will be required), this Guarantee may be amended only with the prior
approval of the Holders of not less than a Majority in liquidation amount of the
Capital Securities and the Guarantor.  The provisions of the
Declaration with respect to amendments thereof apply to the giving of such
approval.

     

    Section
8.3    Notices.

     

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

     

    (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 of the Capital Securities and the Guarantor):

     

    Wilmington
Trust Company

    1100
North Market Street

    Wilmington,
Delaware 19890-1600

    Attention:
Corporate Trust Administration

    Telecopy:  302-636-4140

     

    (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 of the
Capital Securities and to the Guarantee Trustee):

     

    
      
        
        

      

      
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    Maiden
Holdings North America, Ltd.

    6000
Midlantic Drive

    Mount
Laurel, NJ 08054

    Attention:
John M. Marshaleck

    Telecopy:  (856)
437-1111

     

    (c)           If
given to any Holder of the Capital Securities, 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
8.4    Benefit.

     

    This
Guarantee is solely for the benefit of the Beneficiaries and, subject to Section
2.1(a), is not separately transferable from the Capital Securities.

     

    Section
8.5    Governing
Law.

     

    PURSUANT
TO SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, THIS
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

     

    Section
8.6    Counterparts.

     

    This
Guarantee may be executed in one or more counterparts, each of which shall be an
original, but all of which taken together shall constitute one and the same
instrument.

     

    Section
8.7    Separability.

     

    In case
one or more of the provisions contained in this Guarantee shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Guarantee, but this Guarantee shall be construed as if such invalid or illegal
or unenforceable provision had never been contained herein.

     

    Signatures
appear on the following page

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        
          
            
              	
                      MAIDEN
      HOLDINGS NORTH AMERICA,

                      LTD., as
      Guarantor

                    
	 
      
	
                      By:

                    	/s/ Arturo M. Raschbaum 
  
	 
      	
                      Name:
      Arturo M. Raschbaum

                    
	 
      	
                      Title:  
      Chief Executive
    Officer

                    
	 
      
	
                      WILMINGTON TRUST
      COMPANY, as

                      Guarantee
      Trustee

                    
	 
      
	
                      By:

                    	/s/ Christopher J. Slaybaugh 
    
	 
      	
                      Name:
      Christopher J. Slaybaugh

                    
	 
      	
                      Title:   Assistant Vice
  President

                    

            

          

        

      

    

     

    
      
        
        

      

      
        19

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