Document:

THE WARRANT REPRESENTED BY THIS CERTIFICATE (AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF) HAS NOT BEEN REGISTERED UNDER T

AMENDED AND RESTATED

SERIES B WARRANT PURCHASE AGREEMENT

THE WARRANT REPRESENTED BY THIS CERTIFICATE (AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF, AND THE WARRANT MAY NOT BE EXERCISED, EXCEPT IN COMPLIANCE WITH THE REQUIREMENTS OF, OR AN EXEMPTION UNDER, SUCH ACT.

WARRANT TO PURCHASE FIVE

SHARES OF COMMON STOCK OF

PROBE MANUFACTURING, INC.

This certifies that, for value received, __________________ or its registered assigns (“Holder”), is entitled to purchase from Probe Manufacturing, Inc., a Nevada corporation (the “Company”), 5 shares fully paid and non-assessable shares of the Company’s Common Stock (the “Warrant Shares”) for cash at a price of $1.50 per share,  for every unit that they purchased in the Company’s Private Placement Memorandum (the “Stock Purchase Price”), at any time or from time to time up to and including 5:00 p.m. (Pacific time) on May 15, 2008 (the “Expiration Date”), upon surrender to the Company at its principal offices at 25242 Arctic Ocean Drive, Lake Forest, CA 92630 (or at such other location as the Company may advise Holder in writing) of this Warrant properly endorsed with the Notice of Exercise attached hereto duly filled in and signed and, except as provided in Section 2 below, upon payment in cash or by check or wire transfer of the aggregate Stock Purchase Price for the number of Warrant Shares for which this Warrant is being exercised determined in accordance with the provisions hereof.  The Stock Purchase Price and the number of Warrant Shares are subject to adjustment as provided in Section 4 below.  

This Warrant is subject to the following terms and conditions:

1.  EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SALES

The Company agrees that the Warrant Shares purchased under this Warrant will be and are deemed to be issued to Holder as the record owner of such shares as of the close of business on the date on which this Warrant will have been surrendered and payment made for such shares.  Certificates for the Warrant Shares so purchased, together with any other securities or property to which Holder is entitled upon such exercise, will be delivered to Holder by the Company at the Company’s expense within five business days after the rights represented by this Warrant have been so exercised.  In case of a purchase of less than all the Warrant Shares, the Company will cancel this Warrant and execute and deliver a new Warrant of like tenor for the balance of the Warrant Shares purchasable under the Warrant surrendered upon such purchase to Holder within a reasonable time.  Each stock certificate so delivered will be in such denominations of the Company’s Common Stock as may be requested by Holder and will be registered in the name of Holder.

2.  NET EXERCISE RIGHT

2.1

Right to Net Exercise.  In addition to, and without limiting, the other rights of Holder hereunder, Holder will have the right (the “Net Exercise Right”) to exercise this Warrant in part or in total into Warrant Shares as follows at any time during the term hereof.  Upon exercise of the Net Exercise Right, the Company will deliver to Holder, without payment by Holder of any Stock Purchase Price or any cash or other consideration, that number of Warrant Shares computed using the following formula:

X=Y (A-B)

A

Where:

X=

The number of Warrant Shares to be issued to Holder

Y=

The number of Warrant Shares purchasable pursuant to this Warrant

A=

The Fair Market Value of one Warrant Share as of the Exercise Date

B=

The Stock Purchase Price

2.2

Method of Exercise.  The Net Exercise Right may be exercised by Holder by the surrender of this Warrant to the Company at its principal office, together with a written notice specifying that Holder intends to exercise the Net Exercise Right and indicating the number of Warrant Shares to be acquired upon exercise of the Net Exercise Right.  Such exercise will be effective upon the Company’s receipt of this Warrant, together with the exercise notice, or on such later date as is specified in the exercise notice (the “Exercise Date”) and, at Holder’s election, may be made contingent upon the closing of the Company’s initial public offering of any securities pursuant to a registration statement under the Securities Act of 1933, as amended (the “Securities Act”).  Certificates for the Warrant Shares so acquired will be delivered to Holder immediately upon the Exercise Date.  If applicable, the Company will, upon surrender of this Warrant for cancellation, deliver a new Warrant evidencing the rights of Holder to purchase the balance of the Warrant Shares which Holder is entitled to purchase hereunder. 

2.3

Fair Market Value.  The “Fair Market Value” of a Warrant Share as of a particular date means:  

(a)  if conversion of the Warrant Shares is effective as of the closing of the Company’s initial public offering of any securities pursuant to a registration statement under the Securities Act, the “price to public” specified for such shares in the final prospectus for such public offering; 

(b)  if the shares of the Company’s Common Stock are traded on a national securities exchange or quoted on the National Association of Securities Dealers National Market System, the average of the closing prices for such shares for the five trading days immediately prior to the Exercise Date; however, if the shares of the Company’s Common Stock are traded in another over-the-counter market, then the average of the mean between the bid and asked prices for such five trading days; and 

(c)  otherwise, the price as determined in good faith by the Board of Directors of the Company.

2.4

Automatic Exercise.  Notwithstanding the foregoing, if the aggregate value of the cash, stock or other property that Holder would have received if Holder had exercised this Warrant immediately prior to the closing of an Acquisition (as defined below) or an Asset Transfer (as defined below) exceeds the aggregate Stock Purchase Price of the Warrant Shares, then this Warrant shall automatically be deemed exercised, with no notice required by Holder and in lieu of the cash exercise provided for in this Warrant, on a Net Issuance Exercise basis as described in Section 2.1 above.  For purposes of this Section 2.4, the value of such stock or other property will be deemed its fair market value as determined in good faith by the Board of Directors of the Company. As used herein, “Acquisition” shall mean any consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than 50% of the Company’s voting power immediately after such consolidation, merger or reorganization, or any transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Company’s voting power is transferred, excluding any consolidation or merger effected exclusively to change the domicile of the Company.  As used herein, “Asset Transfer” shall mean a sale, lease or other disposition of all or substantially all of the assets of the Company.

3.  SHARES TO BE FULLY PAID; RESERVATION OF SHARES

The Company covenants and agrees that all Warrant Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable and free from all preemptive rights of any stockholder and free of all taxes, liens and charges with respect to the issue thereof.  The Company further covenants and agrees that, during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved, for the purpose of issue or transfer upon exercise or conversion of the subscription rights evidenced by this Warrant, a sufficient number of shares of the Company’s authorized but unissued Common Stock, or other securities and property, when and as required to provide for the exercise or conversion of the rights represented by this Warrant.  The Company will take all such action as may be necessary to assure that such shares of the Company’s Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any domestic securities exchange upon which the stock may be listed.  The Company will not take any action which would result in any adjustment of the Stock Purchase Price (as defined in Section 4 hereof) if the total number of shares of the Company’s Common Stock issuable after such action upon exercise or conversion of all outstanding warrants, together with all shares then outstanding and all shares then issuable upon exercise of all options and upon the conversion of all convertible securities then outstanding, would exceed the total number of shares of the Company’s Common Stock then authorized by the Company’s Articles of Incorporation.

4.  ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES

The Stock Purchase Price and the number of shares purchasable upon the exercise or conversion of this Warrant will be subject to adjustment from time to time upon the occurrence of certain events described in this Section 4. 

4.1

Subdivision or Combination of Stock.  If the Company at any time subdivides the outstanding shares of the Company’s Common Stock into a greater number of shares, the Stock Purchase Price in effect immediately prior to such subdivision will be proportionately reduced; and conversely, if the Company at any time combines the outstanding shares of the Company’s Common Stock into a smaller number of shares, the Stock Purchase Price in effect immediately prior to such combination will be proportionately increased.  Upon each adjustment of the Stock Purchase Price, Holder will thereafter be entitled to purchase, at the Stock Purchase Price resulting from such adjustment, the number of Warrant Shares obtained by multiplying the Stock Purchase Price in effect immediately prior to such adjustment by the number of Warrant Shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Stock Purchase Price resulting from such adjustment.

4.2

Dividends In Stock, Other Stock Property, Reclassification.  If at any time or from time to time the holders of the Company’s Common Stock (or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) receive or become entitled to receive, without payment therefor:

(a)  any shares of the Company’s Common Stock or any shares of stock or other securities which are at any time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution;

(b)  any cash paid or payable otherwise than as a regular periodic cash dividend at a rate which is substantially consistent with past practice (or, in the case of an initial dividend, at a rate which is substantially consistent with industry practice); or

(c)  any Common Stock or other or additional stock or other securities or property (including cash) by way of spin-off, split up, reclassification, combination of shares or similar corporate rearrangement; (other than shares of the Company’s Common Stock issued as a stock split, adjustments in respect of which will be covered by the terms of subsection 4.1 above), then and in each such case, Holder will, upon the exercise or conversion of this Warrant, be entitled to receive, in addition to the number of Warrant Shares receivable thereupon, and without payment of any additional consideration thereof, the amount of stock and other securities and property (including cash in the cases referred to this Section 4.2 which Holder would hold on the date of such exercise or conversion had he or it been the holder of record of such Common Stock as of the date on which holders of the Company’s Common Stock received or became entitled to receive such shares and/or all other additional stock and other securities and property.

4.3

Organic Change.  Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company's assets or other transaction, in each case which is effected in such a way that the holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) equity securities or assets with respect to or in exchange for Common Stock, is referred to herein as an “Organic Change.”  Prior to the consummation of any Organic Change, the Company shall make appropriate provision (in form and substance satisfactory to Holder) to insure that Holder shall thereafter have the right to acquire and receive, in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the exercise of this Warrant, such shares, securities or assets as may be issued or payable with respect to or in exchange for the number of shares of Common Stock immediately theretofore acquirable and receivable upon exercise of this Warrant had such Organic Change not taken place.  In any such case, the Company shall make appropriate provision (in form and substance satisfactory to Holder) with respect to Holder’s rights and interests to insure that the provisions of this Section 4 and Section 3 hereof shall thereafter be applicable to the Warrant (including, in the case of any such consolidation, merger or sale in which the successor entity or purchasing entity is other than the Company, an immediate adjustment of the Stock Purchase Price to the value for the Common Stock reflected by the terms of such consolidation, merger or sale, and a corresponding immediate adjustment in the number of shares of Common Stock acquirable and receivable upon exercise of the Warrant, if the value so reflected is less than the Stock Purchase Price in effect immediately prior to such consolidation, merger or sale).  The Company shall not effect any such consolidation, merger or sale, unless prior to the consummation thereof, the successor entity (if other than the Company) resulting from consolidation or merger or the entity purchasing such assets assumes by written instrument (in form and substance satisfactory to Holder), the obligation to deliver to Holder such shares, securities or assets as, in accordance with the foregoing provisions, Holder may be entitled to acquire.

4.4

Other Notices.  If at any time:

(a) The Company will declare any cash dividend upon the Company’s Common Stock;

(b) The Company will declare any dividend upon the Company’s Common Stock payable in stock or make any special dividend or other distribution to the holders of the Company’s Common Stock;

(c) The Company will offer for subscription pro rata to the holders of the Company’s Common Stock any additional shares of stock of any class or other rights;

(d) There will be any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation;

(e) There will be a voluntary or involuntary dissolution, liquidation or winding up of the Company; or

(f) The Company will take or propose to take any other action, notice of which is actually provided to or is required to be provided, pursuant to any written agreement, to holders of the Company’s Common Stock, then, in any one or more of said cases, the Company will give, by first class mail, postage prepaid, addressed to Holder at Holder’s address as shown on the books of the Company, (x) at least 10 days prior written notice of the date on which the books of the Company will close or a record will be taken for such dividends, distribution or subscription rights or for determining rights to vote in respect of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, and (y) in the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, at least 20 days prior written notice of the date when the same will take place.  Any notice given in accordance with the foregoing clause (x) will also specify, in the case of any such dividend, distribution or subscription rights, the date on which the holders of the Company’s Common Stock will be entitled to exchange their stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, as the case may be.

4.5

Certain Events.  If any other event occurs as to which the other provisions of this Section 4 are not strictly applicable or if strictly applicable would not fairly protect the purchase rights of Holder in accordance with the essential intent and principles of such provisions, then the Board of Directors of the Company will make an adjustment in the number and class of shares available under the Warrant, the Stock Purchase Price and/or the application of such provisions, in accordance with such essential intent and principles, so as to protect such purchase rights as aforesaid.  The adjustment will be such as will give Holder upon exercise for the same aggregate Stock Purchase Price the total number, class and kind of shares as Holder would have owned had the Warrant been exercised or converted prior to the event and had he or it continued to hold such shares until after the event requiring adjustment.

5.  ISSUE TAX

The issuance of certificates for shares of the Company’s Common Stock upon the exercise or conversion of this Warrant will be made without charge to Holder for any issue tax in respect thereof; provided, however, that the Company will not be required to pay any tax which may be payable in respect of any transfer involving the issuance and delivery of any certificate in a name other than that of the original Holder of the Warrant being exercised.

6.  CLOSING OF BOOKS

The Company will at no time close its transfer books against the transfer of this Warrant or of any shares of the Company’s Common Stock issued or issuable upon the exercise of this Warrant in any manner which interferes with the timely exercise of this Warrant.

7.  NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY

Nothing contained in this Warrant will be construed as conferring upon Holder the right to vote or to consent or to receive notice as a stockholder in respect of meetings of stockholders for the election of directors of the Company or any other matters or any rights whatsoever as a stockholder of the Company.  No dividends or interest will accrue or be payable in respect of this Warrant or the interest represented hereby or the shares purchasable hereunder until, and only to the extent that, this Warrant has been exercised or converted.  No provisions hereof, in the absence of affirmative action by Holder to purchase shares of the Company’s Common Stock, and no mere enumeration herein of the rights or privileges of Holder, will give rise to any liability of Holder for the Stock Purchase Price or as a stockholder of the Company, whether such liability is asserted by the Company or by its creditors.

8.  EXPIRATION

This Warrant will expire at 5:00 PM on the fifth anniversary of the date hereof.

9.

REGISTRATION RIGHTS

Company shall at its own expense, register all warrants issued under this Agreement in the next registration statement filed by the Company.

10.  WARRANTS TRANSFERABLE

Subject to the provisions of the Agreement, this Warrant and all rights hereunder are transferable, in whole or in part, without charge to Holder (except for transfer taxes), upon surrender of this Warrant properly endorsed (by Holder executing the Assignment Form annexed hereto).  Each Holder of this Warrant, by taking or holding the same, consents and agrees that this Warrant, when endorsed in blank, will be deemed negotiable, and that the holder hereof, when this Warrant will have been so endorsed, may be treated by the Company and all other persons dealing with this Warrant as the absolute owner hereof for any purpose and as transferee hereof on the books of the Company, any notice to the contrary notwithstanding; but, until such transfer on such books, the Company may treat the registered Holder hereof as the Holder hereof for all purposes.

11.  MODIFICATION AND WAIVER

This Warrant and any provision hereof may be amended, waived or modified upon written consent of the Company and Holder.

12.  NOTICES

Any notice or other communication required or permitted to be given or made under this Agreement: (i) will be in writing, (ii) will be delivered by hand delivery, U.S. Mail (certified or registered), Federal Express, UPS, Overnight, Airborne, or other nationally recognized delivery service, fax, or e-mail or other means of electronic transmission, and (iii) will be addressed as follows:

To Holder at:

________________

________________

________________

________________

________________

To the Company at:

Probe Manufacturing, Inc.

3050 Pullman St.

Costa Mesa, CA  92626

Attn: Reza Zarif

Fax:  714-424-2972

Email:  rzarif@probemi.com

or to such other address as such Person may designate by 10 days advance notice to the other parties hereto.

Absent fraud or manifest error, a receipt signed by the addressee or such addressee’s authorized representative, a certified or registered mail receipt, a signed delivery service confirmation or a fax or e-mail confirmation of transmission will constitute proof of delivery.  Any notice actually received by the addressee will constitute delivery notwithstanding the failure to comply with any provisions of this subsection.

A notice delivered by regular or certified U.S. Mail will be deemed to have been delivered on the third business day after such notice’s post-mark.  Any other notice will be deemed to have been received on the date and time of the signed receipt or confirmation of delivery or transmission thereof, unless that receipt or confirmation date and time is not a business day or is after 5:00 p.m. local time on a business day, in which case such notice will be deemed to have been received on the next succeeding business day.

13.  GOVERNING LAW

This Warrant will be governed by and construed under the laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California (other than conflict of law rules which might result in the application of the laws of any other jurisdiction).

14.  LOST WARRANTS OR STOCK CERTIFICATES

The Company represents and warrants to Holder that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of this Warrant or any stock certificate, the Company at its expense will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

15.  FRACTIONAL SHARES

No fractional shares will be issued upon exercise of this Warrant.  The Company will, in lieu of issuing any fractional share, pay the Holder entitled to such fraction a sum in cash equal to such fraction multiplied by the then effective Stock Purchase Price.

16.  RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT

The rights and obligations of the Company, of Holder and of the holder of any shares of stock issued upon exercise of this Warrant, shall survive the exercise of this Warrant.

17.  BINDING EFFECT ON SUCCESSORS

This Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets.  All of the obligations of the Company relating to the Common Stock issuable upon the exercise of this Warrant shall survive the exercise and termination of this Warrant.  All of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the holder hereof. 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its duly authorized officers, effective as of November 10, 2006.

Probe Manufacturing, Inc.

A Nevada Corporation

By: __________________________________

Name: ________________________________

Title: _________________________________

Warrant Holder

By: __________________________________

Name: ________________________________

1

Table of Contents

	NOTICE OF EXERCISE

	Signature

NOTICE OF EXERCISE

(To be signed only upon exercise of Warrant)

To:

PROBE MANUFACTURING, INC.

The undersigned, Holder of the attached Warrant, hereby irrevocably elects to exercise the purchase right represented by the Warrant as follows:

[  ]

The undersigned elects to purchase for cash or check _______ full shares of Common Stock of Probe Manufacturing, Inc. and herewith makes payment of $_________ for those shares;

[  ]

The undersigned elects to effect a net exercise of the Warrant, exercising the Warrant [ ] in full or [ ] as to the following gross number of shares: _______________. 

The undersigned requests that the certificates for the shares be issued in the name of, and delivered to, __________________________________, whose address is ______________ ____________________________.

[The undersigned further requests that a new Warrant for the unexercised portion of the attached Warrant be issued in the name of, and delivered to, ________________________, whose address is _______________________________________.]

Dated: _________________

(Signature must conform in all respects to name of Holder as specified on the face of the attached Warrant.)

Signature

Address

ASSIGNMENT FORM

FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells, assigns, and transfers unto the Assignee named below all of the rights of the undersigned under the within Warrant with respect to the number of shares of Common Stock set forth below:

Name of Assignee:

Address:

No. of Shares:

and does hereby irrevocably constitute and appoint _________, attorney-in-fact, to make such transfer on the books of Probe Manufacturing, Inc., maintained for that purpose, with full power of substitution in the premises.

Dated:______________________________________________________

Signature of Holder: ___________________________________________Exhibit
4.1

EXECUTION COPY

CERTIFICATE OF
DESIGNATION

OF

PERPETUAL NON-CUMULATIVE PREFERENCE
SHARES

OF

ASPEN INSURANCE HOLDINGS LIMITED

ASPEN
INSURANCE HOLDINGS LIMITED, a Bermudian company (the
‘‘Company’’), hereby
certifies that pursuant to resolutions of the Board of Directors of the
Company duly adopted on October  17,  2005 and
October  30,  2006 and of the Pricing Committee of the
Board of Directors duly adopted on November  10,  2006, the
creation and issue of 8,000,000 7.401% Perpetual Non-Cumulative
Preference Shares, par value 0.15144558¢ per share (the
‘‘Preference Shares’’), was
authorized and the designation, rights, preferences, privileges and
qualifications, limitations and restrictions of the 8,000,000
Preference Shares (in addition to the applicable provisions set forth
in the Company’s Memorandum of Association (the
‘‘Memorandum of
Association’’) and Amended and Restated Bye-Laws
(the ‘‘Bye-Laws’’)), were
fixed as follows:

1.    Designation.

The
designation of this series of preference shares shall be the
‘‘7.401% Perpetual Non-Cumulative Preference
Shares’’, and the number of shares constituting this
series shall be 8,000,000; provided that, if the Company elects
to issue additional Preference Shares after the date of this
Certificate of Designation, as contemplated in the prospectus
supplement dated November  10,  2006 that relates to the
Preference Shares, the Company may increase the number of shares
constituting this series by the number of such additional Preference
Shares. The Preference Shares shall have a liquidation preference (the
‘‘liquidation preference’’)
of U.S.$25 per Preference Share. Each Preference Share shall be
identical in all respects to every other Preference Share, except for
the issue price, date of issuance, and, in some cases, the initial
dividend payment date. Any Preference Shares issued after the date of
this Certificate of Designation shall be issued on a Dividend Payment
Date (as defined below) at an issue price that does not exceed the
liquidation preference of U.S.$25 per Preference Share. The number of
authorized Preference Shares may be reduced (but not below the number
of Preference Shares then issued and outstanding) by further resolution
duly adopted by the Board of Directors. No such reduction shall affect
the due authorization of any issued and outstanding Preference Shares
of this series.

2.    Definitions. As used herein,
the following terms shall have the following
meanings:

‘‘Affiliate’’
has the meaning ascribed to it, on the date hereof, under
Rule 405 of the Securities Act of 1933, as
amended.

‘‘Agent
Members’’ has the meaning assigned to such term
in Section 13.

‘‘Appointing Preference
Shares’’ mean any other class or series of
preference shares of the Company, including any Perpetual PIERS and the
Perpetual Preference Shares issued upon conversion of the Perpetual
PIERS, if any, ranking equally with the Preference Shares either as to
dividend rights or rights upon liquidation, winding-up or dissolution
and upon which like appointing rights have been conferred and are
exercisable.

‘‘Appointing
Rights’’ have the meaning assigned to such term
in Section 5(c).

‘‘Board of
Directors’’ means the Board of Directors of the
Company or, with respect to any action to be taken by the Board of
Directors, any committee of the Board of Directors duly authorized to
take such action.

1

‘‘Business
Day’’ means a day that is a Monday, Tuesday,
Wednesday, Thursday or Friday and is not a day on which banking
institutions in New York City or Bermuda generally are authorized or
obligated by law or executive order to close.

‘‘Calculation Agent’’
means the nationally recognized calculation agent appointed by the
Company prior to any redemption notice and prior to January
1,  2017.

‘‘Capital
Stock’’ of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) equity of
such Person, including any Preferred Stock, but excluding any debt
securities convertible into such
equity.

‘‘Comparable Treasury
Issue’’ means the United States Treasury security
selected by the Calculation Agent as having a maturity comparable to
the term remaining to the Dividend Payment Date on January 1,
2017 that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate
perpetual preferred stock having similar terms as the Preference Shares
with respect to the payment of dividends and distributions of assets
upon liquidation, dissolution or winding-up of the issuer of such
preferred stock.

‘‘Comparable Treasury
Price’’ means, with respect to any Redemption
Date for the Preference Shares, the average of the Reference Treasury
Dealer Quotations for such Redemption Date, after excluding the highest
and lowest of such Reference Treasury Dealer Quotations, or if the
Calculation Agent obtains fewer than five such Reference Treasury
Dealer Quotations, the average of all such
quotations.

‘‘Depositary’’
means, with respect to Preference Shares issuable in whole or in part
in the form of one or more Global Preference Shares, a clearing agency
registered under Section 17A of the Exchange Act that is designated to
act as depositary for such Preference Shares, and initially shall be
DTC.

‘‘Dividend Payment
Date’’ has the meaning assigned to such term in
Section 4(a).

‘‘Dividend
Period’’ has the meaning assigned to such term in
Section 4(d).

‘‘Dividend Record
Date’’ means, with respect to each Dividend
Payment Date, 5:00 p.m. (New York City time) on the December  15,
March 15, June 15 or September 15 immediately
preceding such Dividend Payment
Date.

‘‘DTC’’ means
The Depository Trust Company.

‘‘Exchange
Act’’ means the United States Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder.

‘‘Fixed
Rate’’ means an amount per annum equal to
7.401% of the liquidation preference per Preference
Share.

‘‘Fixed Rate
Period’’ means the Dividend Periods up to but
excluding January  1,  2017, in which dividends on the
Preference Shares shall be payable at the Fixed
Rate.

‘‘Floating
Rate’’ means an amount per annum equal to 3-Month
LIBOR plus 3.28%; provided that the Floating Rate will in
no event exceed the maximum rate permitted by law. The Floating Rate
shall be reset on the applicable LIBOR Reset Date for each Dividend
Period during the Floating Rate Period.

‘‘Floating Rate Period’’
means each Dividend Period commencing after the expiration of the Fixed
Rate Period, in which dividends on the Preference Shares shall be
payable at the Floating Rate.

‘‘Global
Preference Shares’’ has the meaning assigned to
such term in Section 13(a).

‘‘Holder’’ or
‘‘holder’’ means the Person
in whose name a Preference Share is registered on the
Registrar’s books.

‘‘Issue
Date’’ means November  15,  2006, the
original date of issuance of the Preference
Shares.

‘‘Junior
Shares’’ mean the Ordinary Shares and any other
class of share capital or series of preference shares established after
the Issue Date by the Board of Directors, the terms of which do not
expressly provide that such class or series ranks senior to or on a
parity with, the Preference Shares as to dividend rights or rights upon
the liquidation, winding-up or dissolution of the
Company.

2

‘‘LIBOR Determination
Date’’ means the second London Banking Day
immediately preceding the applicable LIBOR Reset
Date.

‘‘LIBOR Reset
Date’’ has the meaning assigned to such term in
Section 4(c).

‘‘Liquidation
Distribution’’ has the meaning assigned to such
term in Section 7(a).

‘‘liquidation
preference’’ has the meaning assigned to such
term in Section 1.

‘‘London Banking
Day’’ means a day on which commercial banks are
open for business, including dealings in United States dollars, in
London.

‘‘Moneyline Telerate Page
3750’’ means the display page on Moneyline
Telerate (or any successor service) on such page (or any other page as
may replace such page on such service) for the purpose of displaying
the London interbank rates of major banks for United States
dollars.

‘‘Nonpayment’’
has the meaning assigned to such term in Section 5(c).

‘‘NYSE’’ means the New
York Stock Exchange,
Inc.

‘‘Officer’’ means
the Chief Executive Officer, the Chief Financial Officer, the Chief
Operating Officer, the Secretary and the Assistant Secretary of the
Company.

‘‘Ordinary
Shares’’ mean the ordinary shares, par value
0.15144558¢ per share, of the Company, or any other class of
shares resulting from successive changes or reclassifications of such
Ordinary Shares consisting solely of changes in par value, or from par
value to no par value, or as a result of a subdivision, combination,
merger, consolidation or similar transaction in which the Company is a
constituent corporation.

‘‘Parity
Shares’’ mean the Preference Shares, the
Perpetual PIERS and any Perpetual Preference Shares issued upon
conversion of Perpetual PIERS, and any other class of share capital or
series of preference shares established after the Issue Date by the
Board of Directors, the terms of which expressly provide that such
class or series will rank on a parity with the Preference Shares as to
dividend rights or rights upon the liquidation, winding-up or
dissolution of the Company.

‘‘Paying
Agent’’ initially means Mellon Investors Services
LLC. The Company may, in its sole discretion, remove the Paying Agent
within 10 calendar days’ prior notice to the Paying Agent,
provided that the Company shall appoint a successor Paying Agent who
shall accept such appointment prior to the effectiveness of such
removal.

‘‘Perpetual
PIERS’’ mean the series of preference shares, par
value 0.15144558¢ per share, of the Company designated as the
5.625% Perpetual Preferred Income Equity Replacement Securities
(Perpetual PIERS).

‘‘Perpetual
Preference Shares’’ mean the series of preference
shares, par value 0.15144558¢ per share, of the Company
designated as the Perpetual Preference Shares, issuable upon the
conversion of the Perpetual
PIERS.

‘‘Person’’
means any individual, corporation, general partnership, limited
partnership, limited liability partnership, joint venture, association,
joint-stock company, trust, limited liability company, unincorporated
organization or government or any agency or political subdivision
thereof.

‘‘Preference Share
Director’’ has the meaning assigned to such term
in Section 5(c).

‘‘Preferred
Stock,’’ as applied to the Capital Stock of any
Person, means Capital Stock of any class of classes (however
designated) that is preferred as the payment of dividends, or as to
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person over other shares of Capital Stock or any
other class of such Person.

‘‘Redemption
Date’’ means, in the case of an optional
redemption, the day specified in the Company’s notice of
redemption.

‘‘Reference Treasury
Dealer’’ means each of three primary U.S.
government securities dealers (each a ‘‘Primary Treasury
Dealer’’), as specified by the Company; provided
that if any Primary Treasury Dealer 

3

as specified by the Company ceases to be a
Primary Treasury Dealer, the Company shall substitute for such Primary
Treasury Dealer another Primary Treasury Dealer and if the Company
fails to select a substitute within a reasonable period of time, then
the substitute will be a Primary Treasury Dealer selected by the
Calculation Agent after consultation with the
Company.

‘‘Reference Treasury Dealer
Quotations’’ means, with respect to the Reference
Treasury Dealer and any Redemption Date, the average, as determined by
the Calculation Agent, of the bid and asked prices for the Comparable
Treasury Issue (expressed, in each case, as a percentage of its
principal amount) quoted in writing to the Calculation Agent by such
Reference Treasury Dealer at 5:00 p.m. (New York City time) on
the third Business Day preceding such Redemption
Date.

‘‘Register’’
means the register of issued Preference Shares maintained by the
Registrar.

‘‘Registrar’’
initially means Mellon Investors Services LLC. The Company may, in its
sole discretion, remove the Registrar within 10 calendar days’
prior notice to the Registrar, provided that the Company shall
appoint a successor Registrar who shall accept such appointment prior
to the effectiveness of such
removal.

‘‘Securities
Act’’ means the United States Securities Act of
1933, as amended.

‘‘Senior
Shares’’ mean any class of share capital or
series of preference shares established after the Issue Date by the
Board of Directors, the terms of which expressly provide that such
class or series will rank senior to the Preference Shares as to
dividend rights or rights upon the liquidation, winding-up or
dissolution of the Company.

‘‘3-Month
LIBOR’’ means, with respect to any LIBOR
Determination Date:

			
		(i) 	the rate for
3-month deposits in United States dollars as that appears on the
Moneyline Telerate Page 3750 as of 11:00 a.m. (London time) on the
LIBOR Determination Date for that Floating Rate Period, unless fewer
than two such offered rates so appear;

			
		(ii) 	if fewer than two offered rates
appear, or no rate appears, as the case may be, on the LIBOR
Determination Date for that Floating Date Period on the Moneyline
Telerate Page 3750, the rate calculated by the Calculation Agent based
on two offered quotations after requesting the principal London offices
of each of four major reference banks in the London interbank market to
provide the Calculation Agent with offered quotations for deposits in
United States dollars for the period of three months, commencing on the
first day of that Floating Rate Period, to prime banks in the London
interbank markets at approximately 11:00 a.m. (London time) on that
date and in a principal amount that is representative for a single
transaction in United States dollars in that market at that time;

			
		(iii) 	if fewer than two offered
quotations referred to in clause (ii) are provided as requested, the
rate calculated by the Calculation Agent as the arithmetic mean of the
rates quoted at approximately 11:00 a.m. (New York City time) on the
LIBOR Determination Date for that Floating Rate Period by three major
banks (which will not include affiliates of the Company) in New York
City selected by the Calculation Agent for loans in United States
dollars to leading European banks for a period of three months and in a
principal amount that is representative for a single transaction in
United States dollars in that market at that time; or

			
		(iv) 	if the banks so selected by the
Calculation Agent are not quoting as mentioned in clause (iii), the
rate equal to the 3-Month LIBOR for the previous Floating Rate
Period.

‘‘Transfer
Agent’’ initially means Mellon Investors Services
LLC. The Company may, in its sole discretion, remove the Transfer Agent
with 10 days’ prior notice to the Transfer Agent;
provided, that the Company shall appoint a successor Transfer
Agent who shall accept such appointment prior to the effectiveness of
such removal.

‘‘Treasury
Rate’’ means the rate per year equal to the
quarterly equivalent yield to maturity of the Comparable Treasury
Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date. The Treasury Rate
shall be calculated on the third Business Day preceding the Redemption
Date.

4

3.    Ranking. The Preference
Shares shall, with respect to dividend rights or rights upon the
liquidation, winding-up or dissolution of the Company, rank
(a) senior to all Junior Shares, including, without limitation,
the Ordinary Shares, (b) on a parity with all Parity Shares,
including, without limitation, the Perpetual PIERS and the Perpetual
Preference Shares issuable upon conversion of the Perpetual PIERS,
(c) junior to any Senior Shares and (d) junior to all of the
Company’s existing and future debt
obligations.

4.    Dividend
Rights.

(a)    The holders of outstanding Preference
Shares shall be entitled to receive dividends, when, as and if declared
by the Board of Directors, out of funds legally available for that
purpose under Bermuda law and to the extent that at the time of
declaration and payment the Company has reasonable grounds to believe
that it is, and after the payment would be, able to pay its liabilities
as they become due and if the realizable value of its assets would
thereby not be less than the aggregate of its liabilities and issued
share capital and share capital premium accounts, at the Fixed Rate, as
described in Section 4(b), from the Issue Date, quarterly in arrears,
on January  1, April  1, July  1 and October  1
of each year (each, a ‘‘Dividend Payment
Date’’), commencing on January  1,
2007, and thereafter at the Floating Rate, as described in Section
4(c), quarterly in arrears on each Dividend Payment Date, commencing on
January  1,  2017.

(b)    During the Fixed Rate
Period, when, as and if declared by the Board of Directors, out of
funds legally available for the payment of dividends under Bermuda law,
dividends on the Preference Shares shall be payable quarterly at the
Fixed Rate on a non-cumulative basis with respect to each Dividend
Period.

(c)    During each Floating Rate Period, when, as and
if declared by the Board of Directors, out of funds legally available
for the payment of dividends under Bermuda law, dividends on the
Preference Shares shall be payable quarterly, with respect to each
Floating Rate Period at the Floating Rate on the LIBOR Determination
Date for the relevant Dividend Period on a non-cumulative basis on each
Dividend Payment Date. The Floating Rate shall be reset quarterly on
January  1, April  1, July  1 and October  1 of
each year (each, a ‘‘LIBOR Reset
Date’’) for the Dividend Period beginning on such
date. During the Floating Rate Period, if any LIBOR Reset Date falls on
a day that is not a Business Day, the LIBOR Reset Date shall be
postponed to the next day that is a Business Day.

(d)    A
dividend period (each, a ‘‘Dividend
Period’’) is the period from and including a
Dividend Payment Date to, but excluding, the next Dividend Payment
Date, except that the initial Dividend Period shall commence on and
include the Issue Date of the Preference Shares and shall end on and
exclude the January  1,  2007 Dividend Payment Date. During
the Fixed Rate Period, if any Dividend Payment Date is not a Business
Day, then dividends will be payable on the first Business Day following
such Dividend Payment Date, without accrual to the actual payment date.
During the Floating Rate Period, if any Dividend Payment Date other
than a Redemption Date falls on a day that is not a Business Day, the
Dividend Payment Date shall be postponed to the next day that is a
Business Day, and dividends will accumulate to such actual Dividend
Payment Date. If a Redemption Date, whether during the Fixed Rate
Period or the Floating Rate Period, falls on a day that is not a
Business Day, the payment of dividends and redemption price shall be
made on the first Business Day following such Redemption Date, without
accrual to the actual payment date.

(e)    During the Fixed
Rate Period, dividends payable on the Preference Shares shall be
computed on the basis of a 360-day year consisting of twelve 30-day
months with respect to a full Dividend Period, and on the basis of the
actual number of days elapsed during the period with respect to a
Dividend Period other than a full Dividend
Period.

(f)    During the Floating Rate Period, dividends
payable on the Preference Shares shall be computed by multiplying the
Floating Rate in effect for such Dividend Period by a fraction, the
numerator of which shall be the actual number of days elapsed during
such Dividend Period (determined by including the first day of such
Dividend Period and excluding the last day, which is the Dividend
Payment Date), and the denominator of which shall be 360, and
multiplying the result by the aggregate liquidation preference of the
Preference Shares.

5

(g)    Dividends shall be paid to the
holders of the Preference Shares on the applicable Dividend Record
Date. The Dividend Record Date shall apply regardless of whether any
particular Dividend Record Date is a Business Day.

(h)
        Dividends on the Preference Shares shall not be
cumulative. To the extent that any dividends payable on the Preference
Shares on any Dividend Payment Date are not declared and paid, in full
or otherwise, on such Dividend Payment Date, then such unpaid dividends
shall not accumulate and the Company shall have no obligation to pay
dividends for such Dividend Period on or subsequent to such Dividend
Payment Date, whether or not dividends are declared on Preference
Shares for any subsequent Dividend Period.

(i)    So long as
any Preference Shares remain outstanding, unless the full dividends for
the most recently ended Dividend Period on all outstanding Preference
Shares and Parity Shares have been declared and paid (or declared and a
sum sufficient for the payment thereof has been set aside): (i) no
dividend whatsoever shall be declared or paid on the Junior Shares; and
(ii) no Junior Shares shall be purchased, redeemed or otherwise
acquired for consideration by the Company, directly or indirectly
(other than as a result of a reclassification of Junior Shares for or
into other Junior Shares, or the exchange or conversion of one share of
Junior Shares for or into another share of Junior Shares). In such
event, the restrictions set forth in the preceding sentence shall
continue until such time as full dividends on all outstanding
Preference Shares and Parity Shares have been declared and paid (or
declared and a sum sufficient for the payment thereof has been set
aside) for four consecutive Dividend Periods.

(j)    When
dividends are not paid in full (or duly provided for) on any Dividend
Payment Date (or, in the case of Parity Shares having dividend payment
dates different from the Dividend Payment Dates, on a dividend payment
date falling within a Dividend Period) upon the Preference Shares and
any Parity Shares, all dividends declared upon the Preference Shares
and all such Parity Shares payable on such Dividend Payment Date (or,
in the case of Parity Shares having dividend payment dates different
from the Dividend Payment Dates, on a dividend payment date falling
within the Dividend Period related to such Dividend Payment Date) shall
be declared pro rata based on the aggregate liquidation
preference of the Preference Shares and such Parity
Shares.

(k)    Holders of Preference Shares shall have the
Appointing Rights provided in Section 5(c).

5.    Voting,
Appointing and Other Rights.

(a)    The Preference
Shares shall have no voting rights except as provided in Section 5(b)
and Section 6 or otherwise required by Bermuda law from time to
time.

(b)    Notwithstanding the Bye-Laws, so long as any
Preference Shares remain outstanding, unless a greater percentage shall
then be required by applicable law, the Company shall not, without the
affirmative vote or written consent of the holders of at least 66
2/3% of the aggregate liquidation preference of the Preference
Shares then outstanding and all series of Appointing Preference Shares
then outstanding, voting or consenting, as the case may be, together as
a single class:

(i)    authorize or issue any
class or series of Senior Shares (or any security convertible into or
exchangeable for Senior Shares); or

(ii)    amend the Memorandum of
Associations or Bye-Laws in such a manner that would materially
adversely affect the specified rights, preferences or privileges of
holders of the Preference Shares.

For the avoidance of
doubt, the Company may create, authorize, increase the authorized
amount of, or issue any class or series of Parity Shares or Junior
Shares, without the affirmative vote or written consent of the holders
of the Preference Shares, and in taking such actions the Company shall
not be deemed to have materially adversely affected the specified
rights, preferences or privileges of the holders of the Preference
Shares.

(c)    Whenever full dividends on any Preference
Shares shall have not been declared and paid for the equivalent of any
six Dividend Periods, whether or not consecutive (a
‘‘Nonpayment’’), the holders
of the Preference Shares then outstanding and all series of Appointing
Preference Shares then outstanding, 

6

acting together as a single class, will be
entitled to the appointment (the ‘‘Appointing
Rights’’) of a total of two additional members to
the Board of Directors (each, a ‘‘Preference Share
Director’’); provided that the appointment
of any such directors shall not cause the Company to violate the
corporate governance requirement of the NYSE as applied to United
States issuers (or any other securities exchange or automated quotation
system on which securities of the Company may be then listed or quoted)
that listed companies must have a majority of independent directors. In
the event of a Nonpayment, the number of members of the Board of
Directors shall automatically increase by two, subject to the Bye-Laws.
The Preference Share Directors shall be selected by the holders of at
least a majority of the aggregate liquidation preference of the
Preference Shares and any Appointing Preference Shares at a special
meeting called at the request of the holders of at least 20% of
the then outstanding aggregate liquidation preference of the Preference
Shares and any series of Appointing Preference Shares then outstanding.
Whether a majority of the Preference Shares and any Appointing
Preference Shares have been affirmatively voted in favor of an
appointment shall be determined by reference to the aggregate
liquidation preference of the Preference Shares and any Appointing
Preference Shares affirmatively voted at the meeting called to exercise
the Appointing Rights.

If the holders of the Preference Shares
become entitled to the appointment of Preference Share Directors to the
Board of Directors, the Company shall promptly give notice to all
holders and take all action necessary, including calling a meeting or
circulating a consent to permit the nomination and selection of such
directors.

The Board of Directors shall promptly duly appoint
the Preference Share Directors selected by the holders of the
Preference Shares and any series of Appointing Preference Shares then
outstanding in accordance with this Section 5(c). The Board of
Directors shall, subject to the Bye-Laws, determine which class or
classes, as applicable, of directors the Preference Share Directors
shall be a part of and shall allocate the Preference Share Directors to
the class or classes, as applicable, having the longest terms of office
remaining at the time of such appointment. Each Preference Share
Director shall each be entitled to one vote per director on any matter.
If, at the time the Appointing Rights are vested in the holders of the
Preference Shares and any Appointing Preference Shares, there are not
two vacancies on the Board of Directors, the Company will use its best
efforts to increase the number of directors constituting the Board of
Directors.

So long as a Nonpayment shall continue, any vacancy in
the office of a Preference Share Director (other than prior to the
initial appointment of Preference Share Directors after a Nonpayment)
may be filled by the Board of Directors pursuant to an exercise of the
Appointing Rights of the holders of at least a majority of the
aggregate liquidation preference of the Preference Shares then
outstanding and any other Appointing Preference Shares then
outstanding, acting together as a single class.

When the term of
a class of directors of which any Preference Share Director is a part
is expiring, the Board of Directors shall set the size of such class of
directors to be elected by the holders of the Ordinary Shares at a
level to include such Preference Share Director duly appointed by the
Board of Directors upon the exercise of the Appointing Rights.

If
and when dividends for four consecutive Dividend Periods following a
Nonpayment have been paid in full (or declared and a sum sufficient for
the payment thereof has been set aside), then the holders of the
Preference Shares shall be divested of the Appointing Rights (subject
to revesting of the Appointing Rights in the event of any future
Nonpayment pursuant to this Section 5(c)) and, if and when the
Appointing Rights of the holders of the Preference Shares and any
Appointing Preference Shares shall have ceased, the office of the
Preference Share Directors (notwithstanding the class of directors such
Preference Share Directors shall be a part of) shall terminate
forthwith and the number of directors constituting the Board of
Directors shall automatically be reduced by
two.

6.    Amendment or Modification; Waiver.

(a)    To the extent permitted by applicable law, the Board of
Directors may modify the terms of this Certificate of Designation
without the consent of any holder of Preference Shares
to:

			
		(i) 	evidence the
succession of any Person to the obligations of the
Company;

			
		(ii) 	add to the
covenants for the benefit of holders of the Preference Shares or to
surrender any of the rights or powers of the Company under the
Preference Shares;

7

			
		(iii) 	cure
any ambiguity or correct or supplement any provisions that may be
inconsistent, provided that such action shall not adversely
affect the interest of the holders of the Preference Shares in any
material respect;
or

			
		(iv) 	make any other
provision with respect to such matters or questions arising under this
Certificate of Designation which the Company may deem desirable and
which shall not adversely affect the interests of the holders of the
Preference Shares in any material respect.

(b)    Except as
provided below in this Section 6(b), this Certificate of Designation
may be amended, modified or supplemented, and noncompliance in any
particular instance with any provision of this Certificate of
Designation or the Preference Shares may be waived, in each case with
the affirmative vote or written consent of the holders of at least a
majority of the aggregate liquidation preference of the Preference
Shares then outstanding, including any modification occurring in
connection with any merger or consolidation of the Company or
otherwise.

Without the written consent or the affirmative vote of
each holder of the Preference Shares affected thereby (in addition to
the written consent or the affirmative vote of the holders of at least
a majority of the aggregate liquidation preference of the Preference
Shares then outstanding), an amendment or modification under this
Section 6(b) may not:

		
	(i) 	change any Dividend
Payment Date;

		
	(ii) 	reduce the rate of
dividends payable on the Preference Shares, when, as and if declared by
the Board of Directors;

		
	(iii) 	reduce the
redemption price or alter the January  1,  2017 optional
redemption date;

		
	(iv) 	change the place or
currency of payment of the Preference
Shares;

		
	(v) 	impair the right to institute suit
for the enforcement of the Preference Shares;
or

		
	(vi) 	change the percentage of liquidation
preference of the Preference Shares whose holders must approve any
amendment or modification.

7.    Liquidation
Rights.

(a)    In the event of any liquidation, winding-up
or dissolution of the Company, whether voluntary or involuntary, the
holders of the Preference Shares shall be entitled to receive and to be
paid out of the assets of the Company available for distribution to its
shareholders, after satisfaction of liabilities of the Company and
before any payment or distribution shall be made on the Ordinary Shares
or any other class of shares ranking junior to the Preference Shares
upon liquidation, winding-up or dissolution of the Company, the
liquidation preference plus declared but unpaid dividends thereon, if
any, without accumulation of any undeclared dividends (collectively,
the ‘‘Liquidation
Distribution’’).

(b)    After the
payment to the holders of the Preference Shares of the Liquidation
Distribution to which such holders are entitled as provided for in this
Section 7, the holders of Preference Shares as such shall have no right
or claim to any of the remaining assets of the Company.

(c)    If, upon any liquidation, winding-up or dissolution of the
Company, whether voluntary or involuntary, the amounts payable with
respect to the Preference Shares and any other share capital of the
Company ranking on a parity with the Preference Shares upon
liquidation, winding-up or dissolution of the Company are not paid in
full, the holders of the Preference Shares and of such other share
capital shall share ratably in any such distribution of assets of the
Company in proportion to the full respective liquidation distributions
to which they are entitled.

(d)    Neither the sale,
assignment, transfer or lease of all or substantially all the assets or
business of the Company nor the merger or consolidation of the Company
into or with any other Person shall be deemed to be a liquidation,
winding-up or dissolution, voluntary or involuntary, for the purposes
of this Section 7.

8

8.    Optional
Redemption.

(a)    The Company may not redeem Preference
Shares prior to January  1,  2017, except as provided in
Section 8(b). On and after January  1,  2017, the Company
may redeem the Preference Shares at its option, in whole or in part,
upon notice given as provided in Section 8(c), at a redemption price
equal to U.S.$25 per Preference Share, plus an amount equal to any
declared and unpaid dividends (but with no amount in respect of any
dividends that have not been declared prior to the Redemption Date),
out of funds legally available for that purpose under Bermuda law and
to the extent the Company has reasonable grounds to believe that it is,
and after the payment would be, able to pay its liabilities as they
become due.

(b)    Prior to January  1,  2017,
the Company may redeem the Preference Shares at its option, in whole
but not in part, if the Company has submitted to holders of its
Ordinary Shares a proposal for a merger, amalgamation, or
consolidation, arrangement, reconstruction or discontinuance, or if the
Company submits any proposal for any other matter that, as a result of
any change in Bermuda law after November  10,  2006,
requires for its validation or effectuation an affirmative vote of the
holders of the Preference Shares at the time outstanding, whether
voting as a separate series or together with any other series or class
of preference shares as a single class, upon not less than 30 calendar
days nor more than 60 calendar days prior written notice to the
relevant holders, in such form and given in such manner as to be in
accordance with Section 8(c), at a redemption price per Preference
Share equal to the greater of: (1) U.S.$25 per Preference Share
and (2) the sum of the present value of U.S.$25 per Preference Share
and the present value of all undeclared dividends for the Dividend
Periods from the Redemption Date to and including the January
1,  2017 Dividend Payment Date, in each case, discounted to the
Redemption Date on a quarterly basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate, as calculated
by the Calculation Agent, plus 45 basis points, and in each case of (1)
and (2), plus declared and unpaid dividends, (but with no amount in
respect of any dividends that have not been declared prior to the
Redemption Date), out of funds legally available for that purpose under
Bermuda law and to the extent the Company has reasonable grounds to
believe that it is, and after the payment would be, able to pay its
liabilities as they become due.

(c)    Notice of each
redemption of Preference Shares shall be given by first class mail, to
the holders of the Company’s Preference Shares at their
addresses set forth in the Register, mailed not less than 30 calendar
days nor more than 60 calendar days prior to the Redemption Date.
Notwithstanding the foregoing, if the Preference Shares are Global
Preference Shares deposited with or on behalf of DTC, the Company may
give such notice of optional redemption in any manner permitted by
DTC.

(d)    A notice of redemption shall state:

			
		(i) 	the Redemption Date;

			
		(ii) 	the number of Preference
Shares to be redeemed and, if less than all the Preference Shares held
by such holder are to be redeemed, the number of Preference Shares to
be redeemed from such holder;

			
		(iii) 	the CUSIP, ISIN or
similar number or numbers of the Preference Shares to be
redeemed;

			
		(iv) 	the
redemption price and the amount of declared and unpaid dividends, if
any; and

			
		(v) 	if certificated
Preference Shares have been issued, the place or places where holders
may surrender certificates evidencing the Preference Shares for payment
of the redemption price.

(e)    On or prior to the Redemption
Date, the Company will deposit with the Paying Agent an amount in
immediately available funds sufficient to pay the aggregate redemption
price plus any declared and unpaid dividends; provided that if
such payment is deposited on the Redemption Date, it must be received
by the Paying Agent by 10:00 a.m. (New York City time) on the
Redemption Date. An amount equal to the redemption price and any
declared and unpaid dividends shall be paid to the holders promptly
following the later of (i) the Redemption Date and (ii) the time of
book-entry transfer or surrender of the certificate(s) evidencing such
Preference Shares to the Paying Agent, as applicable.

(f)    Any declared but unpaid dividends payable on a Redemption
Date that occurs subsequent to the Dividend Record Date for a Dividend
Period shall not be paid to the holder entitled to receive the

9

redemption price on the Redemption Date, but
rather shall be paid to the holder of record of the redeemed shares on
such Dividend Record Date relating to the Dividend Payment
Date.

(g)    In case of any redemption of only part of the
Preference Shares at the time outstanding, the Preference Shares to be
redeemed shall be selected either pro rata or in such other
manner as the Company may determine to be fair and
equitable.

(h)    If notice of redemption has been duly given
and the Paying Agent holds, on or before the Redemption Date,
immediately available funds sufficient to pay the aggregate redemption
price plus any declared and unpaid dividends, then, as of the
Redemption
Date:

			
		(i) 	dividends shall
cease to be payable on such Preference Shares;

			
		(ii) 	such Preference Shares
shall no longer be deemed outstanding;
and

			
		(iii) 	all rights with
respect to such Preference Shares shall cease and terminate, except
only the right of the holders to receive an amount equal to the
redemption price, plus any declared and unpaid
dividends.

9.    Maturity.

The Preference
Shares have no stated maturity. Accordingly, the Preference Shares
shall remain outstanding perpetually, unless and until the Company
elects to redeem them.

10.     Conversion
Rights.

The Preference Shares are not
convertible.

11.    Consolidation, Merger, Sale or
Conveyance.

(a)    The Company covenants that it will
not merge or amalgamate with or into, consolidate with or convert into
any other entity or sell, assign, transfer, lease or convey all or
substantially all of its properties and assets to any person or entity,
unless:

			
		(i) 	either the
Company shall be the continuing corporation, or the successor (if other
than the Company) shall be a corporation organized under the laws of
the United States of America or a State thereof or the District of
Columbia, Bermuda or any country which is, on the date of this
Certificate of Designation, a member of the Organization of Economic
Cooperation and Development and the Preference Shares are converted
into or exchanged for, in accordance with applicable law, perpetual
non-cumulative preference shares of the successor corporation with
substantially the same rights, powers, preferences and privileges;
and

			
		(ii) 	the Company or such
successor corporation, as the case may be, shall not, immediately after
such merger, amalgamation, consolidation, conversion, sale, assignment,
transfer, lease or conveyance, be in default of any obligation under
the Preference Shares.

(b)    In case of any such merger,
amalgamation, consolidation, conversion, sale, assignment, transfer,
lease or conveyance and upon any conversion of securities into a
successor corporation in accordance with (a) above, such successor
corporation shall succeed to and be substituted for the Company with
the same effect as if it had been named herein as the Company. Such
successor Person thereupon may cause to be signed, and may issue either
in its own name or in the name of the Company, any or all of the
certificates evidencing Preference Shares issuable hereunder which
theretofore shall not have been signed by the Company. All the
certificates issued shall in all respects have the same legal rank and
benefit under this Certificate of Designation as the certificates
theretofore or thereafter issued in accordance with the terms of this
Certificate of Designation as though all of such certificates had been
issued on the Issue Date.

In case of any such merger,
amalgamation, consolidation, conversion, sale, assignment, transfer,
lease or conveyance such change in phraseology and form (but not in
substance) may be made in the certificates evidencing securities for
which the Preference Shares have been exchanged thereafter to be issued
as may be appropriate.

10

12.    Currency of
Payments.

Any payments with respect to the Preference
Shares shall be paid in cash in United States dollars in immediately
available funds.

13.    Form.

(a)    The
Preference Shares shall be issued initially in the form of one or more
fully registered global certificates with the global securities legend
set forth in Exhibit A hereto (‘‘Global
Preference Shares’’), each as set forth on the
form of Preference Shares certificate attached hereto as Exhibit A
which is hereby incorporated in and expressly made a part of this
Certificate of Designation. The Global Preference Shares certificate
may have notations, legends or endorsements required by law, stock
exchange rules, agreements to which the Company is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a
form acceptable to the Company). The Global Preference Shares shall be
deposited on behalf of the holders of the Preference Shares represented
thereby with the Registrar, as custodian for DTC (or with such other
custodian as DTC may direct), and registered in the name of DTC or a
nominee of DTC, duly executed by the Company and countersigned by the
Registrar as hereinafter provided. The aggregate number of Preference
Shares represented by Global Preference Shares may from time to time be
increased or decreased by adjustments made on the records of the
Registrar and DTC or its nominee as hereinafter provided.

In the
event Global Preference Shares are deposited with or on behalf of DTC,
the Company shall execute, and the Registrar shall countersign and
deliver, initially one or more Global Preference Shares certificates
that (a) shall be registered in the name of Cede & Co. or other
nominee of the Depositary and (b) shall be delivered by the Registrar
to DTC or pursuant to DTC’s instructions or held by the
Registrar as custodian for DTC. Members of, or participants in, DTC
(‘‘Agent Members’’) shall
have no rights under this Certificate of Designation with respect to
any Global Preference Shares held on their behalf by DTC or by the
Registrar as the custodian of DTC or under such Global Preference
Shares, and DTC may be treated by the Company, the Registrar and any
agent of the Company or the Registrar as the absolute owner of such
Global Preference Shares for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Registrar
or any agent of the Company or the Registrar from giving effect to any
written certification, proxy or other authorization furnished by DTC or
impair, as between DTC and its Agent Members, the operation of
customary practices of DTC governing the exercise of the rights of a
holder of a beneficial interest in any Global Preference
Shares.

(b)    Owners of beneficial interests in Global
Preference Shares shall not be entitled to receive physical delivery of
certificated Preference Shares,
unless:

			
		(i) 	DTC is unwilling
or unable to continue as Depositary for the Global Preference Shares
and the Company does not appoint a qualified replacement for DTC within
90 calendar days;

			
		(ii) 	DTC
ceases to be a ‘‘clearing agency’’
registered under the Exchange Act and the Company does not appoint a
qualified replacement for DTC within 90 calendar days;
or

			
		(iii) 	the Company decides
to discontinue the use of book-entry transfer through DTC (or any
successor Depositary).

In any such case, the Global
Preference Shares shall be exchanged in whole for certificated
Preference Shares in registered form, with the same terms and of an
equal aggregate liquidation preference (unless the Company determines
otherwise in accordance with applicable law).  Certificated
Preference Shares shall be registered in the name or names of the
Person or Person specified by DTC in a written instrument to the
Registrar.

(c)    An Officer shall sign the Preference Shares
certificate for the Company by manual or facsimile signature. 
If the Officer whose signature is on a Preference Shares certificate no
longer holds that office at the time the Registrar countersigns the
Preference Shares certificate, the Preference Shares certificate shall
be valid nevertheless.

11

A Preference Shares certificate shall not
be valid until an authorized signatory of the Registrar signs the
Preference Shares certificate by manual or facsimile signature. The
signature shall be conclusive evidence that the Preference Shares
certificate has been countersigned under this Certificate of
Designation.

14.    Registration;
Transfer.

(a)    Notwithstanding any provision to the
contrary herein, so long as a Global Preference Share remains
outstanding and is held by or on behalf of the Depositary, transfers of
a Global Preference Share, in whole or in part, or of any beneficial
interest therein, shall only be made in accordance with this
Section  14.

(b)    Transfers of a Global Preference
Share shall be limited to transfers of such Global Preference Share in
whole, but not in part, to nominees of the Depositary or to a successor
of the Depositary or such successor’s
nominee.

15.    Calculation in Respect of Preference
Shares.

The Company will be responsible for making all
calculations called for in respect of the Preference Shares, including,
but not limited to, the determination of the dividends payable on the
Preference Shares. Any calculations made in good faith and without
manifest error will be final and binding on holders. The Company or its
agents will be required to deliver to the Paying Agent a schedule of
its calculations and the Paying Agent will be entitled to rely upon the
accuracy of such calculations without independent verification. The
Paying Agent will forward such calculations to any holder upon the
request of the holder.

16.    Severability.

In the event any
provision of this Certificate of Designation shall be invalid,
unenforceable or illegal, then, to the fullest extent permitted by
applicable law, the validity, enforceability and legality of the
remaining provisions shall not in any way be affected or impaired
thereby.

12

IN WITNESS WHEREOF, the Company has
caused this Certificate of Designation to be signed and attested by the
undersigned this 15th day of November,
2006.

				
	 			ASPEN
INSURANCE HOLDINGS
LIMITED
	 			By:                                                                               
	Attest:                                                                                			 
	

13

EXHIBIT A

FORM
OF
 7.401% PERPETUAL NON-CUMULATIVE PREFERENCE
SHARES

FACE OF SECURITY

[UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
(‘‘DTC’’), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS
AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS
OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE CERTIFICATE OF
DESIGNATION REFERRED TO BELOW.

IN CONNECTION WITH ANY TRANSFER,
THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR AND TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING
RESTRICTIONS.]1

	
		
	

		
	1 	This
legend should be included only if the share certificate evidences
Global Preference Shares.

14

				
	Certificate
Number			Number of
Preference
Shares
	[        ]			[        ]
	

CUSIP
NO.:[        ]

7.401% Perpetual
Non-Cumulative Preference Shares

(par value 0.15144558¢
per share)

(liquidation preference U.S.$25 per Preference
Share)

of

 ASPEN
INSURANCE HOLDINGS LIMITED 

ASPEN
INSURANCE HOLDINGS LIMITED, a Bermudian company (the
‘‘Company’’), hereby certifies that
[                            ]
(the ‘‘Holder’’) is the registered owner of
[                            ]1
[                    , or such number as is
indicated in the records of the Registrar and the
Depository,]2 fully paid and non-assessable preference
shares of the Company designated the 7.401% Perpetual
Non-Cumulative Preference Shares, with a par value of
0.15144558¢ per share and a liquidation preference of U.S.$25
per share (the ‘‘Preference Shares’’). The
Preference Shares are transferable on the books and records of the
Registrar, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer. The
designations, rights, privileges, restrictions, preferences and other
terms and provisions of the Preference Shares represented hereby are
issued and shall in all respects be subject to the provisions of the
Certificate of Designation dated November  15,  2006, as
the same may be amended from time to time (the
‘‘Certificate of Designation’’).
Capitalized terms used herein but not defined shall have the meaning
given them in the Certificate of Designation. The Company will provide
a copy of the Certificate of Designation to a Holder without charge
upon written request to the Company at its principal place of
business.

Reference is hereby made to select provisions of the
Preference Shares set forth on the reverse hereof, and to the
Certificate of Designation, which select provisions and the Certificate
of Designation shall for all purposes have the same effect as if set
forth at this place.

Upon receipt of this certificate, the Holder
is bound by the Certificate of Designation and is entitled to the
benefits thereunder.

Unless the Registrar has properly
countersigned, these Preference Shares shall not be entitled to any
benefit under the Certificate of Designation or be valid or obligatory
for any
purpose.

	
		
	

		
	1 	This
phrase should be included only if the share certificate evidences
certificated Preference
Shares.

		
	2 	This phrase should
be included only if the share certificate evidences Global Preference
Shares.

15

IN WITNESS WHEREOF, the Company has
executed this certificate
this               day
of               ,               .

				
	 			ASPEN
INSURANCE HOLDINGS
LIMITED
	 			By:                                                                               
	 			Name:
	 			Title:
	

16

REGISTRAR’S
COUNTERSIGNATURE

These are Preference Shares referred to in the
within-mentioned Certificate of Designation.

Dated:

				
	 			MELLON
INVESTOR SERVICES LLC, as
Registrar,
	 			By:                                                                         
	 			Authorized
Signatory
	

17

REVERSE OF
SECURITY

Dividends on each Preference Share shall be payable at
the rate provided in the Certificate of Designation.

The
Preference Shares shall be redeemable at the Company’s option in
the manner and accordance with the terms set forth in the Certificate
of Designation.

The Company shall furnish without charge to each
holder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class
or series of share capital and the qualifications, limitations or
restrictions of such preferences and/or rights.

18

ASSIGNMENT

FOR VALUE
RECEIVED, the undersigned assigns and transfers the Preference Shares
evidenced hereby
to:

	
		
	

	
		
	

	
		
	

(Insert
assignee’s social security or tax identification
number)

	
		
	

	
		
	

	
		
	

(Insert
address and zip code of assignee)

and irrevocably
appoints:

	
		
	

	
		
	

	
		
	

agent
to transfer the Preference Shares evidenced hereby on the books of the
Transfer Agent. The agent may substitute another to act for him or
her.

Date:__________________

Signature:__________________________

(Sign exactly as
your name appears on the other side of this Preference Shares
Certificate)

Signature Guarantee:__________________

	
		
	

(Signature must be guaranteed by an
‘‘eligible guarantor institution’’ that is
a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Transfer Agent, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program (‘‘STAMP’’) or such other
‘‘signature guarantee program’’ as may be
determined by the Transfer Agent in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.)

19

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