Document:

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                    NUMBER                          [PRIMUS GUARANTY, LTD. LOGO]                      SHARES
            ----------------------             INCORPORATED UNDER THE LAWS OF BERMUDA         ----------------------

            PRS

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

                COMMON SHARES                                                                      COMMON SHARES

       THIS CERTIFICATE IS TRANSFERABLE IN
       RIDGEFIELD PARK, NJ OR NEW YORK, NY

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               THIS CERTIFIES THAT                                                                                SEE REVERSE
                                                                                                                  FOR CERTAIN
                                                                                                                  DEFINITIONS

               IS THE REGISTERED HOLDER OF

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                    FULLY PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF $     EACH OF THE CAPITAL OF

               Primus Guaranty, Ltd. (hereinafter called the "Company"), transferable on the books of the
               Company by the holder hereof in person or by duly authorized attorney, upon surrender of this
               certificate properly endorsed. This certificate is not valid until countersigned by the Transfer
               Agent and registered by the Registrar.

                                                                                                       COUNTERSIGNED AND REGISTERED:
                                                                                                        MELLON INVESTOR SERVICES LLC
                                                                                                                    TRANSFER AGENT
                                                                                                                    AND REGISTRAR,
                                                                                                           By

                                                                                                              AUTHORIZED SIGNATURE

                                                      COMMON SHARE CERTIFICATE

                        Witness, the seal of the Company and the signatures of its duly authorized officers.

               Dated

                     /s/ Thomas W. Jasper           [PRIMUS GUARANTY, LTD.        /s/ Michael P. Esposito, Jr.
                  CHIEF EXECUTIVE OFFICER               CORPORATE SEAL               CHAIRMAN OF THE BOARD
                                                        BERMUDA 1998]
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                                                 AMERICAN BANK NOTE COMPANY.

                              PRIMUS GUARANTY, LTD.
                                     ------

     The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common   UNIF GIFT MIN ACT-            Custodian
TEN ENT - as tenants by the                        ----------           --------
          entireties                                 (Cust)              (Minor)
JT TEN - as joint tenants with                     under Uniform Gifts to Minors
         right of survivorship                     Act
         and not as tenants                           --------------
         in common                                       (State)

    Additional abbreviations may also be used though not in the above list.

     For value received,                hereby sell, assign and transfer unto
                        ---------------

PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------

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

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 (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

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                                                                          shares
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represented by the within Certificate, and do hereby irrevocably constitute and
appoint

                                                                        Attorney
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to transfer the said shares on the books of the within named Company with full
power of substitution in the premises.

Dated
     --------------------------------

                            ----------------------------------------------------
                    NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND
                            WITH THE NAME AS WRITTEN UPON THE FACE OF THE
                            CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
                            OR ENLARGEMENT OR ANY CHANGE WHATEVER.

SIGNATURE(S) GUARANTEED:

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THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.

THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE ISSUED AND SHALL BE HELD
SUBJECT TO ALL THE PROVISIONS OF THE MEMORANDUM OF ASSOCIATION AND BYE-LAWS OF
THE COMPANY, COPIES OF WHICH ARE ON FILE WITH THE TRANSFER AGENT, AND SHALL BE
TRANSFERABLE IN ACCORDANCE THEREWITH, TO ALL OF WHICH THE HOLDER BY ACCEPTANCE
HEREOF ASSENTS.-------------------------------------------------------------------------------

                              PRIMUS GUARANTY, LTD.

                            2004 SHARE INCENTIVE PLAN

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1.       Purpose of the Plan

         The purpose of this 2004 Share Incentive Plan (the "Plan") is to
advance the interests of the Company and its shareholders by providing a means
to attract, retain, and reward employees, officers, directors of the Company
and/or any of the Company's Subsidiaries and other persons or entities who
provide services to the Company and its Subsidiaries, and to enable such persons
to acquire or increase a proprietary interest in the Company in order to promote
a closer identity of interests between such persons and the Company's
shareholders.

2.       Definitions

         Capitalized terms used in the Plan and not defined elsewhere in the
Plan shall have the meaning set forth in this Section.

         2.1 "Award" means a compensatory award of Shares or right to receive or
purchase Shares. A compensatory award that is payable solely in cash shall not
be treated as an Award for purposes of the Plan, whether or not the amount
payable is measured in whole or in part by reference to the value of the Shares.

         2.2 "Award Agreement" means a written document prescribed by the
Committee and provided to a Participant evidencing the grant of an Award under
the Plan.

         2.3 "Beneficiary" means the person(s) or trust(s) which have been
designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive any rights with respect to an
Award that survive such Participant's death. If, upon a Participant's death,
there is no designated Beneficiary or surviving designated Beneficiary, then the
term Beneficiary means the person(s) or trust(s) entitled by will or the laws of
descent and distribution to receive such rights.

         2.4 "Board" means the Board of Directors of the Company.

         2.5 "Committee" means the committee appointed by the Board to
administer the Plan or the Board, where the Board is acting as the Committee or
performing the functions of the Committee, as set forth in Section 3.

         2.6 "Company" means Primus Guaranty Ltd., a company organized under the
laws of Bermuda.

         2.7 "Disability" means a Participant's physical or mental impairment
such that he or she qualifies for benefits under a long-term disability
insurance plan sponsored by the Company or a Subsidiary.

         2.8 "Participant" means any employee (including any officer of the
Company), director or other individual or entity who has been granted an Award
under the Plan.

                                       1

         2.9 "Qualified Member" means a member of the Committee who is a
"non-employee director" of the Company as defined in Rule 16b-3(b)(3) under the
United States Securities Exchange Act of 1934.

         2.10 "Retirement" means the termination of employment with the Company
and its Subsidiaries by a Participant, the sum of whose age and full years of
completed service with the Company and its Subsidiaries equals at least 70, with
the written consent of the Committee.

         2.11 "Shares" means common shares of the Company and such other
securities as may be substituted or resubstituted for Shares pursuant to Section
6.

         2.12 "Subsidiary" means an entity that is, either directly or through
one or more intermediaries, controlled by the Company.

3.       Administration

         3.1 Committee. The Plan shall be administered by the Compensation
Committee of the Board, unless the Board shall appoint a different committee. At
any time that a member of the Committee is not a Qualified Member, any action
relating to an Award granted or to be granted to a Participant who is then
subject to Section 16 of the Securities Exchange Act of 1934 in respect of the
Company may be taken either by the Board, a subcommittee of the Committee
consisting of two or more Qualified Members or by the Committee but with each
such member who is not a Qualified Member abstaining or recusing himself or
herself from such action, provided that, upon such abstention or recusal, the
Committee remains composed of two or more Qualified Members. Such action,
authorized by such a subcommittee or by the Committee upon the abstention or
recusal of such non-Qualified Member(s), shall be the action of the Committee
for purposes of the Plan. Other provisions of the Plan notwithstanding, the
Board may perform any function of the Committee under the Plan, and that
authority specifically reserved to the Board under the terms of the Plan, the
Company's Bye-Laws, or applicable law shall be exercised by the Board and not by
the Committee. The Board shall serve as the Committee in respect of any Awards
made to any director who is not otherwise employed by the Company.

         3.2 Powers and Duties of Committee. In addition to the powers and
duties specified elsewhere in the Plan, the Committee shall have full authority
and discretion to:

             (a) adopt, amend, suspend, and rescind such rules and regulations
and appoint such agents as the Committee may deem necessary or advisable to
administer the Plan;

             (b) correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any Award,
rules and regulations, Award Agreement, or other instrument hereunder;

             (c) make determinations relating to eligibility for and
entitlements in respect of Awards, and to make all factual findings related
thereto; and

             (d) make all other decisions and determinations as may be required
under the terms of the Plan or as the Committee may deem necessary or advisable
for the administration of the Plan.

         3.3 Claims. If a Participant, or any person claiming any rights under
the Plan from or through any Participant, disputes any determination relating to
the Participant's entitlement in respect of an Award, the Participant or such
other person may, within 30 days of the date of such determination, file a
written claim with the Committee (to the attention of "2004 Share Incentive Plan
Committee" addressed to the Company's corporate headquarters) stating with
specificity the nature of the Participant's claim and reasons therefor. The
Committee shall consider such claim and render its decision within 60 days of
receipt thereof. Such decision,

                                       2

as well as any determination for which a claim is not timely filed, shall be
final and binding upon the Participant or such other person, and the Participant
or such other person may not further pursue his or her claim in any court of law
or equity or other arbitral proceeding.

         3.4 Delegation by Committee. Except to the extent prohibited by
applicable law or the applicable rules of a stock exchange, the Committee may
delegate to any person or persons selected by it, who may or may not be members
of the Board, all or any part of its responsibilities and powers as set in the
Plan. Any such allocation or delegation may be revoked by the Committee at any
time.

         3.5 Limitation of Liability. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by any officer or other employee of the Company or any
Subsidiary, the Company's independent certified public accountants, or any
executive compensation consultant, legal counsel, or other professional retained
by the Company to assist in the administration of the Plan. No member of the
Committee, nor any officer or employee of the Company acting on behalf of the
Committee, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Committee and any officer or employee of the Company acting on
behalf of the Committee or members thereof shall, to the extent permitted by
law, be fully indemnified and protected by the Company with respect to any such
action, determination, or interpretation.

4.       Shares Available for Awards

         4.1 Aggregate Number of Shares Available for Awards. The aggregate
number of Shares for which Awards may be granted under this Plan shall not
exceed 12% of the number of Shares issued and outstanding at the time any Award
is granted. Awards made under this Plan which are forfeited (including a
repurchase or cancellation of Shares subject thereto by the Company in exchange
for the price, if any, paid to the Company for such Shares, or for their par or
other nominal value), cancelled or have expired, shall be disregarded for
purposes of the preceding sentence.

         4.2 Type of Shares Deliverable. The Shares delivered in connection with
Awards may consist, in whole or in part, of authorized and unissued Shares, or
Shares acquired in the market for the account of a Participant.

5.       Awards

         5.1 Eligibility. The Committee shall have the discretion to select
Award recipients from among the following categories of eligible recipients: (i)
individuals who are employees (including officers) of the Company or any
Subsidiary, (ii) individuals who are members of the Board and not otherwise
employed by the Company or any Subsidiary, (iii) any other individual or entity
who provides substantial personal services to the Company or any Subsidiary,
(iv) any individual who has agreed to become an employee of the Company or a
Subsidiary, provided that no such person may receive any payment or exercise any
right relating to an Award until such person has commenced employment, and (v)
individuals formerly employed by the Company or any Subsidiary as compensation
in respect of their employment with the Company or any Subsidiary.

         5.2 Type of Awards. The Committee shall have the discretion to
determine the type of Awards to be granted, including, but not limited to,
options to purchase Shares, bonus Shares or restricted Shares, and appreciation
rights, share units and dividend equivalents that may be settled in Shares. The
Committee is authorized to grant Awards as a bonus, or to grant Awards in lieu
of obligations of the Company or any Subsidiary to pay cash or grant other
awards under other plans or compensatory arrangements, to the extent permitted
by such other plans or arrangements. Shares issued pursuant to an Award in the
nature of a purchase right (e.g., options) shall be purchased for such
consideration, paid for at such times, by such methods, and in

                                       3

such forms, including cash, Share repurchase, other Awards, Participant
services, Award cancellation or other consideration, as the Committee shall
determine, provided that in each case for such value of not less than the
aggregate par value of the relevant Shares.

         5.3 Terms and Conditions of Awards. The Committee shall determine the
number of Awards to be granted, the number of Shares to which an Award will
relate, all other terms and conditions of any Award granted under the Plan
(including, but not limited to, any exercise price, grant price, or purchase
price, any restrictions or conditions relating to transferability, forfeiture,
exercisability, or settlement of an Award, and any schedule or performance
conditions for the lapse of such restrictions or conditions, and accelerations
or modifications thereof, based in each case on such considerations as the
Committee shall determine), and all other matters to be determined in connection
with an Award. The Committee may determine whether, to what extent, and under
what circumstances an Award may be settled, or the exercise price of an Award
may be paid, in cash, Shares, other Awards, or other consideration, or an Award
may be canceled, forfeited, or surrendered.

         5.4 Option Repricing. As to any Award granted as an option to purchase
Shares or an appreciation right payable in Shares, the Committee is authorized
to subsequently reduce the applicable exercise price relating to such Award, or
take such other action as may be considered a repricing of such Award under
generally accepted accounting principles.

         5.5 Stand-Alone, Additional, Tandem, and Substitute Awards. Awards
granted under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution or exchange
for, any other Award or any award granted under another plan of the Company, any
Subsidiary, or any business entity to be acquired by the Company or a
Subsidiary, any other right of a Participant to receive payment from the Company
or any Subsidiary. Such additional, tandem, and substituted or exchanged Awards
may be granted at any time. The Committee may determine that, in granting a new
Award, the intrinsic value of any surrendered Award or award may be applied to
reduce the exercise price of any option or appreciation right or purchase price
of any other Award.

         5.6 Acceleration of Vesting. Unless otherwise determined in an Award
Agreement, as to any Participant who was granted an Award in his or her capacity
as an employee, upon termination of his or her employment by reason of death,
Disability or Retirement, all conditions and/or restrictions relating to the
continued performance of services and/or the achievement of performance
objectives with respect to the exercisability or full enjoyment of an Award
shall immediately lapse. Notwithstanding the foregoing, with respect to any
Award pursuant to which the number of Shares that vest increases or decreases
based on achievement that is greater or lower than a target level of performance
over a stated period of time, the number of Shares for which such Award shall
vest upon such termination of employment shall equal the number of Shares that
would have vested if target level performance were achieved, multiplied by a
fraction, the numerator of which is the number of days during the performance
period that the Participant was actually employed, and the denominator of which
is the total number of days in the performance period.

6.       Adjustments

         In the event of any change in the outstanding Shares by reason of any
Share dividend or split, reorganization, recapitalization, merger, amalgamation,
consolidation, spin-off, combination or exchange of Shares, repurchase,
liquidation, dissolution or other corporate exchange, any large, special and
non-recurring dividend or distribution to shareholders, or other similar
corporate transaction, the Committee may make such substitution or adjustment,
if any, as it deems to be equitable and in order to preserve, without enlarging,
the rights of Participants, as to (i) the number and kind of Shares which may be
delivered in connection with Awards granted thereafter, (ii) the number and kind
of Shares subject to or deliverable in respect of outstanding Awards, and (iii)
the exercise price, grant price or purchase price relating to any Award. In

                                       4

addition, the Committee is authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards (including cancellation of
Awards in exchange for the intrinsic (i.e., in-the-money) value, if any, of the
vested portion thereof, substitution of Awards using securities or other
obligations of a successor or other entity, acceleration of the expiration date
for Awards, or adjustment to performance goals in respect of Awards) in
recognition of unusual or nonrecurring events (including events described in the
preceding sentence, as well as acquisitions and dispositions of businesses and
assets) affecting the Company, any Subsidiary or any business unit, or the
financial statements of the Company or any Subsidiary, or in response to changes
in applicable laws, regulations, or accounting principles. Notwithstanding the
foregoing, if any such event will result in the acquisition of all or
substantially all of the Company's outstanding Shares, then if the document
governing such acquisition (e.g., merger agreement) specifies the treatment of
outstanding Awards, such treatment shall govern without the need for any action
by the Committee.

7.       General Provisions

         7.1 Compliance with Laws and Obligations. The Company shall not be
obligated to issue or deliver Shares in connection with any Award or take any
other action under the Plan in a transaction subject to the registration
requirements of any applicable securities law, any requirement under any listing
agreement between the Company and any securities exchange or automated quotation
system, or any other law, regulation, or contractual obligation of the Company,
until the Company is satisfied that such laws, regulations, and other
obligations of the Company have been complied with in full. Certificates
representing Shares issued under the Plan will be subject to such stop-transfer
orders and other restrictions as may be applicable under such laws, regulations,
and other obligations of the Company, including any requirement that a legend or
legends be placed thereon.

         7.2 Limitations on Transferability. Awards and other rights under the
Plan will not be transferable by a Participant except to a Beneficiary in the
event of the Participant's death (to the extent any such Award, by its terms,
survives the Participant's death), and, if exercisable, shall be exercisable
during the lifetime of a Participant only by such Participant or his guardian or
legal representative; provided, however, that such Awards and other rights may
be transferred during the lifetime of the Participant, for purposes of the
Participant's estate planning or other purposes consistent with the purposes of
the Plan (as determined by the Committee), and may be exercised by such
transferees in accordance with the terms of such Award, but only if and to the
extent permitted by the Committee. Awards and other rights under the Plan may
not be pledged, mortgaged, hypothecated, or otherwise encumbered, and shall not
be subject to the claims of creditors. A Beneficiary, transferee, or other
person claiming any rights under the Plan from or through any Participant shall
be subject to all terms and conditions of the Plan and any Award Agreement
applicable to such Participant, except as otherwise determined by the Committee,
and to any additional terms and conditions deemed necessary or appropriate by
the Committee.

         7.3 No Right to Continued Employment; Leaves of Absence. Neither the
Plan, the grant of any Award, nor any other action taken hereunder shall be
construed as giving any employee, consultant, director, or other person the
right to be retained in the employ or service of the Company or any of its
Subsidiaries (for the vesting period or any other period of time), nor shall it
interfere in any way with the right of the Company or any of its Subsidiaries to
terminate any person's employment or service at any time. Unless otherwise
specified in the applicable Award Agreement, (i) an approved leave of absence
shall not be considered a termination of employment or service for purposes of
an Award under the Plan, and (ii) any Participant who is employed by or performs
services for a Subsidiary shall be considered to have terminated employment or
service for purposes of an Award under the Plan if such Subsidiary is sold or no
longer qualifies as a Subsidiary of the Company, unless such Participant remains
employed by the Company or another Subsidiary.

                                       5

         7.4 Taxes. The Company and any Subsidiary is authorized to withhold
from any delivery of Shares in connection with an Award, any other payment
relating to an Award, or any payroll or other payment to a Participant, amounts
of withholding and other taxes due or potentially payable in connection with any
transaction involving an Award, and to take such other action as the Committee
may deem advisable to enable the Company, its Subsidiaries and Participants to
satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include authority to
withhold Shares or receive or accept Shares by way of repurchase, Participant
services, or other consideration and to make cash payments in respect thereof in
satisfaction of withholding tax obligations.

         7.5 Changes to the Plan and Awards. The Board may amend, suspend,
discontinue, or terminate the Plan or the Committee's authority to grant Awards
under the Plan without the consent of shareholders or Participants, except that
any amendment shall be subject to the approval of the Company's shareholders at
or before the next annual meeting of shareholders for which the record date is
after the date of such Board action if such shareholder approval is required by
any applicable law, regulation or stock exchange rule, and the Board may
otherwise, in its discretion, determine to submit other such amendments to
shareholders for approval; provided, however, that, without the consent of an
affected Participant, no such action may materially impair the rights of such
Participant under any Award theretofore granted. The Committee may amend,
suspend, discontinue, or terminate any Award theretofore granted and any Award
Agreement relating thereto; provided, however, that, without the consent of an
affected Participant, no such action may materially impair the rights of such
Participant under such Award. Any action taken by the Committee pursuant to
Section 6 shall not be treated as an action described in this Section 7.5.

         7.6 No Right to Awards; No Shareholder Rights. No Participant or other
person shall have any claim to be granted any Award under the Plan, and there is
no obligation for uniformity of treatment of Participants, employees,
consultants, or directors. No Award shall confer on any Participant any of the
rights of a shareholder of the Company unless and until Shares are duly issued
or transferred and delivered to the Participant in accordance with the terms of
the Award.

         7.7 Unfunded Status of Awards; Creation of Trusts. The Plan is intended
to constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award shall give any such Participant any
rights that are greater than those of a general creditor of the Company;
provided, however, that the Committee may authorize the creation of trusts or
make other arrangements to meet the Company's obligations under the Plan to
deliver cash, Shares, other Awards, or other consideration pursuant to any
Award, which trusts or other arrangements shall be consistent with the
"unfunded" status of the Plan unless the Committee otherwise determines.

         7.8 Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor the submission of the Plan or of any amendment to shareholders for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other compensatory arrangements as it may deem desirable,
including the granting of awards otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific cases.

         7.9 Successors and Assigns. The Plan and Award Agreements may be
assigned by the Company to any successor to the Company's business. The Plan and
any applicable Award Agreement shall be binding on all successors and assigns of
the Company and a Participant, including any permitted transferee of a
Participant, the Beneficiary or estate of such Participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant's creditors.

                                       6

         7.10 Governing Law. The Plan and all Award Agreements shall be governed
by and construed in accordance with the laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York,
except to the extent that the laws of Bermuda apply as a result of the Company
being incorporated in Bermuda.

         7.11 Severability of Provisions. If any provision of the Plan shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and the Plan shall be construed and enforced
as if such provisions had not been included.

         7.12 Plan Termination. Unless earlier terminated by the Board, the Plan
shall terminate on the day before the tenth anniversary of the later of the date
the Company's shareholders originally approved the Plan (May 27, 2004) or the
date of any subsequent shareholder approval of the Plan. Upon any such
termination of the Plan, no new authorizations of grants of Awards may be made,
but then-outstanding Awards shall remain outstanding in accordance with their
terms, and the Committee otherwise shall retain its full powers under the Plan
with respect to such Awards.

                                       7

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