Document:

Exhibit  4.1

 

CERTIFICATE OF DESIGNATION

OF

 

8 1⁄2 %
CUMULATIVE REDEEMABLE PREFERENCE SHARES

 

OF

 

WATFORD HOLDINGS LTD.

 

Watford Holdings Ltd.,
a Bermuda company (the “Company”), HEREBY CERTIFIES that pursuant to resolutions of the Board of Directors adopted on
14 March, 2014, the creation of the 81⁄2% Cumulative Redeemable Preference Shares, par value U.S. $0.01 per share and
liquidation preference U.S. $25 per share (the “Preference Shares”) were authorized and the designations, preferences
and privileges, voting rights, relative, participating, optional and other special rights, and qualifications, limitations and
restrictions of the Preference Shares, in addition to those set forth in the Memorandum of Association and Bye-Laws of the Company,
were fixed as follows:

 

Section.1. Designation
The distinctive serial designation of such series of Preference Shares is “81⁄2% Preference Shares,” par
value U.S. $0.01 per share. Each Preference Share shall be identical in all respects to every other Preference Share, except as
to the respective dates from which dividends thereon shall accumulate, to the extent such dates may differ as permitted pursuant
to Section 4(a).

 

Section 2. Number
of Shares The authorized number of shares constituting the Preference Shares on the date hereof shall be10,000,000. Any Preference
Shares retired by purchase or redemption, or otherwise acquired by the Company or converted into another series of preference
shares, will have the status of authorized but unissued Preference Shares and may be reissued as part of the same class or series
or may be reclassified and reissued by the Board of Directors in the same manner as any other authorized and unissued shares.

 

Section 3. Interpretation

 

(a)In this Certificate of Designation
the following words and expressions shall, where not inconsistent with the context, have the following meanings:

 

	“Additional Director”	 	has the meaning specified in Section 7(b).
	 	 	 
	“Bye-Laws”	 	the bye-laws of the Company, as they may be amended from time to time.
	 	 	 
	“Board of Directors”	 	the Board of Directors of the Company.
	 	 	 
	“Business Day”	 	a day that is a Monday, Tuesday, Wednesday, Thursday or Friday, and is not
    a day on which banking institutions in New

    	 

    	

    

	 	 	York City and Hamilton, Bermuda generally are authorized or
    obligated by law or executive order to close.
	 	 	 
	“Certificate of Designation”	 	this Certificate of Designation relating to the Preference Shares, as it
    may be amended from time to time.
	 	 	 
	“Closing Date”	 	the date of the initial closing in respect of the private placement of Preference
    Shares described in the Company’s Confidential Private Placement Memorandum, dated January 2014, related to the Company’s
    offering of Common Shares and Preference Shares.
	 	 	 
	“Common Shares”	 	the common shares, par value U.S. $0.01 per share, of the Company.
	 	 	 
	“Companies Act”	 	the Companies Act 1981 of Bermuda.
	 	 	 
	“Dividend Payment Date”	 	has the meaning specified in Section 4(a).
	 	 	 
	“Dividend Period”	 	has the meaning specified in Section 4(a).
	 	 	 
	“Dividend Record Date”	 	has the meaning specified in Section 4(a).
	 	 	 
	“Fixed Rate”	 	has the meaning specified in Section 4(a).
	 	 	 
	“Fixed Rate Period”	 	has the meaning specified in Section 4(a).
	 	 	 
	“Floating Rate”	 	has the meaning specified in Section 4(a).
	 	 	 
	“Floating Rate Period”	 	has the meaning specified in Section 4(a).
	 	 	 
	“IPO”	 	the
    initial registered public offering of the Preference Shares in the United States or a listing of the Preference Shares
    on a United States national securities exchange.
	 	 	 
	“Junior Stock”	 	the Common Shares and any other class or series of shares of the
    Company that ranks junior to the Preference Shares either as to the payment of dividends (whether such dividends
    are cumulative or non-cumulative) or as to the distribution of assets upon any liquidation, dissolution or winding-up of the
    Company.

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	“Liquidation Preference”	 	has the meaning specified in Section 5(a).
	 	 	 
	“Margin”	 	has the meaning specified in Section 4(a).
	 	 	 
	“Optional Redemption” ”	 	has the meaning specified in Section 6(b)(1).
	 	 	 
	“Parity Stock”	 	any class or series of shares of the Company that ranks equally with the
    Preference Shares as to payment of dividends and the distribution of assets on any liquidation, dissolution or winding-up
    of the Company.
	 	 	 
	“Preference Shares”	 	has the meaning specified in the recitals.
	 	 	 
	“Preference Shareholders’ Agreement”	 	the shareholders’ agreement, dated as of the date hereof, as amended form
    time to time, among the Company and the holders of the Preference Shares.
	 	 	 
	“Register
    of Members”	 	the Register of Members of the Company.
	 	 	 
	“set aside for payment”	 	without any action other than the following, the recording by the Company
    in its accounting ledgers of any accounting or bookkeeping entry which indicates, pursuant to a declaration of a dividend
    or other distribution by the Board of Directors, the allocation of the funds to be so paid on any class or series of the Company’s
    shares; provided, however, that if any funds for any class or series of Junior Stock or any class or series of Parity Stock
    are placed in a separate account of the Company, then “set aside for payment” with respect to the Preference Shares
    shall mean placing such funds in a separate account.
	 	 	 

	 	(b)	In this Certificate of Designation, where not inconsistent with
    the context:
	 	 	 
	 	(1)	words denoting the plural number include the singular number and vice versa;
	 	 	 
	 	(2)	words denoting the masculine gender include the feminine gender;
	 	 	 
	 	(3)	words
    importing persons include companies, associations or bodies of persons whether corporate or
    not;
	 	 	 
	 	(4)	the word:
	 	 	 

	 	(i)	“may” shall be construed as permissive; and

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	 	(ii)	“shall” shall be construed as imperative;
	 	 	 

	 	(5)	a reference to statutory provision shall be deemed to include
    any amendment or re-enactment thereof.
	 	(c)	Expressions referring to writing or written shall, unless the contrary intention
    appears, include facsimile, printing, lithography, photography, e-mail and other modes of representing words in a visible
    form.
	 	 	 
	 	(d)	Headings used in this Certificate of Designation are for convenience only
    and are not to be used or relied upon in the construction hereof.

 

Section 4. Dividends

 

(a)       Rate Holders of Preference
Shares will be entitled to receive, only when, as and if declared by the Board of Directors, out of funds legally available for
the payment of dividends under Bermuda law, cumulative cash dividends payable quarterly on the last day of March, June, September
and December, commencing June 30, 2014 (each, a “Dividend Payment Date”). Dividends will accrue (i) from (and including)
the Closing Date to (but excluding) June 30, 2019 (the “Fixed Rate Period”) at 81⁄2% (the “Fixed Rate”) of
the $25 per share liquidation preference per annum (equivalent to $2.125 per share per annum); and (ii) from (and including) June
30, 2019 (the “Floating Rate Period”), at a floating rate per annum (the “Floating Rate”) equal to 3 month
U.S. dollar LIBOR plus a margin determined on the Closing Date and calculated as the difference between (x) the Fixed Rate and
(y) the 5 year “mid” swap rate to the Floating Rate as set out on the IRSB18 at noon Eastern Standard Time on the date
of calculation (the “Margin”); provided, that, if, at any time, the 3 month U.S. dollar LIBOR shall be less than 1%,
then the 3 month U.S. dollar LIBOR for the purposes of calculating the Floating Rate at the time of such calculation shall be
1%.

 

Dividends that are
payable on Preference Shares on any Dividend Payment Date will be payable to holders of record of the Preference Shares as they
appear on the Register of Members on the applicable record date, which shall be the fifteenth day of the month preceding that
Dividend Payment Date or such other record date fixed by the Board of Directors that is not more than 60 nor less than 10 days
prior to such Dividend Payment Date (each, a “Dividend Record Date”). These Dividend Record Dates will apply regardless
of whether a particular Dividend Record Date is a Business Day.

 

A dividend period (each,
a “Dividend Period”) is the period from and including a Dividend Payment Date or the initial issue date, as the case
may be, to but excluding, the next Dividend Payment Date. No interest, or sum of money in lieu of interest, will be payable in
respect of any dividend payments on the Preference Shares which may be deferred or in arrears. During the Fixed Rate Period, dividends
payable on the Preference Shares will be computed on the basis of a 360-day year consisting of twelve 30-day months. During the
Floating Rate

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Period, dividends payable
on the Preference Shares will be computed on the basis of actual days elapsed over a year consisting of 365 days.

 

If any date on which
dividends would otherwise be payable is not a business day, then the dividend payment date will be the next succeeding business
day after the original Dividend Payment Date, and no additional dividends will accumulate on the amount so payable from such date
to such next succeeding business day.

 

Dividends on the Preference
Shares are cumulative. Consequently, if the Board of Directors does not authorize and declare a dividend for any Dividend Period,
holders of the Preference Shares will still be entitled to receive a dividend for such Dividend Period, and such undeclared dividend
will accumulate and will be payable.

 

Holders of Preference
Shares shall not be entitled to any other dividends or distributions other than the right to payment of accrued but unpaid dividends
(if any) on the Preference Shares as specified in this Section 4.

 

(b)       Priority of Dividends So
long as any Preference Shares remain outstanding for any Dividend Period, unless the full dividends for the latest completed Dividend
Period on all issued and outstanding Preference Shares have been declared and paid or declared and a sum sufficient for the payment
thereof has been set aside for payment: (1) no dividend (other than a dividend in Common Shares or in any other shares ranking
junior to the Preference Shares as to dividends and upon liquidation, dissolution or winding-up) will be declared or paid or a
sum sufficient for the payment thereof set aside for such payment or other distribution declared or made upon the Company’s Common
Shares or upon any other shares ranking junior to the Preference Shares as to dividends or upon liquidation, dissolution or winding-up;
and (2) no Common Shares, other shares ranking junior to or on a parity with the Preference Shares as to dividends or upon liquidation,
dissolution or winding-up will be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or
made available for a sinking fund for the redemption of any such shares) by the Company.

 

(c)       Restrictions on Payment of Dividends
The Company will not be permitted to pay dividends on the Preference Shares (even if such dividends have been previously declared)
if there are reasonable grounds for believing that the Company is, or would after the payment be, unable to pay its liabilities
as they become due; or the realizable value of the Company’s assets would thereby be less than its liabilities.

 

(d)       Notice Whenever
dividends payable on Preference Shares have not been declared by the Board of Directors and paid on all of the Preference Shares
for any full Dividend Period occurring prior to the occurrence of an IPO, the Company will provide notice as soon as practicable
that a dividend has not been declared and will not be paid for such Dividend Period to each holder of the Preference Shares (or
to J.P. Morgan Securities LLC and/or its private banking and wealth management affiliates (collectively, “J.P. Morgan”)
or

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another third party
selected by the Company for further dissemination to each holder of the Preference Shares by J.P. Morgan or such other third party).

 

Section 5. Liquidation
Rights

 

(a)       Voluntary or Involuntary Liquidation
Upon any voluntary or involuntary liquidation, dissolution or winding-up of the Company, holders of the Preference Shares
are entitled to receive out of the Company’s assets legally available for distribution to shareholders, after satisfaction of
indebtedness and other non-equity claims, if any, a liquidation preference in the amount of U.S. $25 per preferred share (the
“Liquidation Preference”), plus declared and unpaid dividends, if any, to, but excluding, the date fixed for distribution,
with accumulation of any undeclared dividends, before any distribution of assets is made to holders of Common Shares or other
Junior Stock. Holders of the Preference Shares will not be entitled to any other amounts from the Company after they have received
their full Liquidation Preference.

 

(b)       Partial Payment If the Company’s
assets are not sufficient to pay the Liquidation Preference in full to all holders of the Preference Shares, the amounts paid
to the holders of Preference Shares will be paid pro rata in accordance with the respective aggregate liquidation preferences
of such holders.

 

(c)       Residual Distributions If
the Liquidation Preference has been paid in full to all holders of the Preference Shares, the holders of any other class of shares
of the Company shall be entitled to receive all of the Company’s remaining assets according to their respective rights and preferences.

 

(d)       Merger, Amalgamation, Consolidation
and Sale of Assets Not Liquidation For purposes of this Section 5, a merger, amalgamation, consolidation, arrangement or reconstruction
involving the Company or the sale or transfer of all or substantially all of the shares or the property or business of the Company
will not be deemed to constitute a liquidation, dissolution or winding-up of the Company.

 

Section 6. Redemption

 

(a)       Optional
Redemption by the Company

 

(1)       The Preference Shares are not subject
to any mandatory redemption, sinking fund, retirement fund, purchase fund or other similar provisions. The Preference Shares are
not redeemable by the Company prior to June 30, 2019. Subject to the Companies Act, the Preference Shares will be redeemable at
the Company’s option, in whole or in part, upon notice given as provided in Section 6(a)(2), at a redemption price equal to U.S.
$25 per Preference Share, plus all declared and unpaid dividends, if any, to, but excluding, the date of redemption, with accumulation
of any undeclared dividends on or after June 30, 2019.

 

(2)       Notice of every redemption of Preference
Shares shall be given by first class mail to the holders of record of the Preference Shares to be redeemed, mailed not less than
30 nor 

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more than 60 days prior
to the date fixed for redemption. Each such notice given to a holder shall state: (1) the redemption date; (2) the number of Preference
Shares to be redeemed and, if less than all of the Preference Shares held by such holder are to be redeemed, the number of such
Preference Shares to be redeemed from such holder; (3) the redemption price; and (4) the place or places where holders may surrender
certificates evidencing the Preference Shares (if any) for payment of the redemption price.

 

(3)       In case of any redemption of only
part of the Preference Shares at the time issued and 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.

 

(4)       If a notice of redemption has been
duly given and if all funds necessary for the redemption have been set aside for payment by the Company for the benefit of the
holders of any Preference Shares called for redemption, then, on and after the redemption date dividends shall cease to accumulate
on all Preference Shares so called for redemption, all Preference Shares so called for redemption shall no longer be deemed issued-and outstanding and all rights of holders of such Preference Shares shall forthwith on such redemption date cease and terminate,
except the right of the holders thereof to transfer the Preference Shares prior to the redemption date and the right to receive
the amount payable on such redemption pursuant to Section 6(a).

 

(b)       Optional
Redemption by the Holder

 

(1)       Each holder of the Preference Shares
may at any time on or after June 30, 2034, at such holder’s sole option and election, require the Company to redeem in cash any
or all of the Preference Shares held by such holder at the $25 per share liquidation preference plus an amount equal to all accumulated
and unpaid dividends thereon to the date of redemption, whether or not declared (an “Optional Redemption”).

 

(2)       To effect a redemption of the Preference
Shares, the holder of record thereof shall make a written demand for such redemption to the Company at its principal executive
offices setting forth therein the number of Preference Shares to be redeemed and the certificate or certificates representing
such Preference Shares, if any.

 

(3)       If the Company does not have sufficient
funds legally available to redeem all Preference Shares which the holders thereof have requested the Company to redeem, the Company
shall redeem a pro rata portion of each such holder’s Preference Shares out of funds legally available therefor, based on the
respective amounts which would otherwise be payable in respect of the Preference Shares to be redeemed if the legally available
funds were sufficient to redeem all such shares, and shall redeem the remaining shares to have been redeemed as soon as practicable
after the Company has funds legally available therefor.

 

Section 7. Voting
Rights General Except as provided below and Bermuda law, the holders of the Preference Shares will not have any voting rights.

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(a)       Right to Elect
One Director upon Nonpayment Events Whenever dividends payable on Preference Shares have not been declared by the Board of
Directors and paid for an aggregate amount equivalent to six full Dividend Periods (whether or not consecutive) on all of the
Preference Shares or if the Company fails to effect an Optional Redemption requested by the holders of the Preference Shares from
amounts legally available for such purpose, the holders of the Preference Shares will have the right, voting as a single class,
to elect one director to the Board of Directors (the “Additional Director”). The Company will use its best efforts to
effectuate the election or appointment of this one director.

 

Whenever dividends
on the Preference Shares have been paid in full, or declared and sufficient funds have been set aside, the right of holders of
the Preference Shares to be represented by a Director will cease (but subject always to the same provision for the vesting of
such rights in the case of any future suspension of payments in an amount equivalent to dividends for six full dividend periods
whether or not consecutive), and the terms of office of the additional Director elected or appointed to the Board will terminate.

 

At any time when such
special voting power has vested in the holders of the Preference Shares as described in the preceding paragraphs, such right may
be exercised initially either at a special meeting of the holders of the Preference Shares or at any annual general meeting of
shareholders, and thereafter at annual general meetings of shareholders. At any time when such special right has vested, the chairman
of the Company will, upon the written request of the holders of record of at least 10% of the Preference Shares then issued and
outstanding addressed to the Company secretary, call a special general meeting of the holders of the Preference Shares for the
purpose of electing the Director. Such meeting will be held at the earliest practicable date in such place as may be designated
pursuant to the Bye-Laws of the Company (or if there be no designation, at the Company’s principal office in Bermuda). If such
meeting is not called within 20 days after the secretary has been personally served with such request, or within 60 days after
mailing the same by registered or certified mail addressed to the Company secretary at the Company’s principal office, then the
holders of record of at least 10% of the Preference Shares may designate in writing one of their number to call such meeting at
the Company’s expense, and such meeting may be called by such person so designated upon the notice required for annual general
meetings of shareholders and will be held in Bermuda, unless otherwise designated. Any holder of the Preference Shares will have
access to the Company’s register of members for the purpose of causing meetings of shareholders to be called pursuant to these
provisions. Notwithstanding the foregoing, no such special meeting will be called during the period within 90 days immediately
preceding the date fixed for the next annual general meeting of shareholders.

 

At any annual or special
general meeting at which the holders of the Preference Shares have the special right to elect directors as described above, the
presence, in person or by proxy, of the holders of 50% of the Preference Shares then issued and outstanding will be required to
constitute a quorum for the election of any director by the holders of Preference Shares voting as a separate class. At any such
meeting or adjournment thereof the absence of a quorum of the Preference Shares will not prevent the election of directors other
than the Additional Director, 

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and the absence of a
quorum for the election of such other directors will not prevent the election of the Additional Director.

 

During any period in
which the holders of the Preference Shares have the right to vote as a class for an Additional Director as described above, any
vacancies in the Board of Directors will be filled by vote of a majority of the Board of Directors pursuant to the Bye-Laws. During
such period, the Additional Director will continue in office (1) until the next succeeding annual general meeting or until their
successors, if any, are elected by such holders or (2) unless required by applicable law, rule or regulation to continue in office
for a longer period, until termination of the right of the holders of the Preference Shares to vote as a class for directors,
if earlier. Immediately upon any termination of the right of the holders of the Preference Shares then issued and outstanding
to vote for directors as provided herein, the terms of office of the Additional Director then in office so elected by the holders
of the Preference Shares issued and outstanding will terminate.

 

(b)       Voting on Variations
of Rights and Senior Shares

 

(1)       Except as set forth in Section
7, so long as any Preference Shares are issued and outstanding, in addition to any other vote or consent of shareholders required
by law or by the Bye-Laws, the sanction of a resolution passed by at least 662⁄3 of the combined voting power of the issued and
outstanding Preference Shares at which a quorum (consisting of the presence, in person or by proxy, of the holders of 50% of the
Preference Shares) is present shall be necessary for effecting or validating any amendment, alteration or repeal of any of the
provisions of the Bye-Laws or this Certificate of Designations that would vary the rights, preferences or voting powers of the
holders of the Preference Shares; provided, however, that the creation or issuance of any Junior Stock or Parity Stock shall not
be deemed to vary the rights, preferences or voting powers of the holders of Preference Shares.

 

(2)       The holders of the Preference Shares
shall not be entitled to vote on any sale of all or substantially all of the assets of the Company.

 

(3)       On any item on which the holders
of Preference Shares are entitled to vote, such holders will be entitled to one (1) vote for each Preference Share held.

 

(4)       The foregoing voting provisions
of this Section 7 will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required
shall be effected, all issued and outstanding Preference Shares shall have been redeemed or called for redemption upon proper
notice and sufficient funds shall have been set aside for payment by the Company for the benefit of the holders of Preference
Shares to effect such redemption as set forth in Section 6.

 

Section 8. Record
Holders To the fullest extent permitted by applicable law, the Company may treat the record holder of any Preference Share
as the true and lawful owner thereof for all purposes, and the Company shall not be affected by any notice to the contrary.

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Section 9. Notices
All notices or communications in respect of Preference Shares shall be sufficiently given if given in writing and delivered
in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of
Designation, the Bye-Laws or by applicable law.

 

Section 10. No Preemptive
Rights No Preference Share shall have any rights of preemption whatsoever as to any securities of the Company, or any warrants,
rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or options,
may be designated, issued or granted.

 

Section 11.
Limitations on Transfer and Ownership The holders of Preference Shares shall be subject to the limitations on transfer
and ownership contained in the Bye-laws.

 

Section 12. Conversion
The Preference Shares shall not be convertible into or exchangeable for any other securities or property of the Company.

 

Section 13.
Other Rights The Preference Shares shall not have any voting powers, preferences or relative, participating, optional or
other special rights, or qualifications, limitations or restrictions other than as set forth in this Certificate of Designation,
the Preference Shareholders’ Agreement, the Bye-laws or applicable law.

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IN WITNESS WHEREOF,
WATFORD HOLDINGS LTD. has caused this certificate to be signed this 14TH day of March, 2014.

 

	 	Watford Holdings Ltd.
	 	 
	 	By:	/s/ John Rathgeber
	 		Name:	John Rathgeber
	 		Title:	DirectorExhibit 4.2

 

Execution Copy

 

 

 

 

WATFORD HOLDINGS LTD.

 

COMMON SHAREHOLDERS’
AGREEMENT

 

March 25, 2014

 

 

 

    	 

    	

    

	Section 1.	 	Certain Definitions	1
	Section 2.	 	Corporate Governance	5
	2.01	 	Subsidiary Governance	5
	2.02	 	Bye-Law Provisions	5
	2.03	 	Voting Limitation	6
	2.04	 	Board of Directors	7
	Section 3.	 	Transfers of Securities	9
	3.01	 	Restrictions on Transfer	9
	3.02	 	Other Restrictions on Transfers	12
	3.03	 	Legend	13
	Section 4.	 	Additional Liquidity Rights	13
	4.01	 	Additional Liquidity Rights	13
	Section 5.	 	Periodic Information Reporting Requirements	14
	5.01	 	Quarterly Financial Statements	14
	5.02	 	Annual Financial Statements	14
	5.03	 	Additional Information	14
	5.04	 	Confidentiality	15
	Section 6.	 	Certain Sale and Other Requirements; Certain Preemptive Rights	15
	6.01	 	Recapitalization	15
	6.02	 	Certain Restrictions	15
	6.03	 	Regulatory Repurchase	16
	6.04	 	Exchange Act	17
	6.05	 	Preemptive Rights	17
	Section 7.	 	Tax Matters	19
	7.01	 	Cooperation	19
	Section 8.	 	Representations and Warranties	19
	8.01	 	Authority; Enforceability	19
	8.02	 	No Breach	19
	8.03	 	Consents	20
	8.04	 	Investment Representations	20
	Section 9.	 	Miscellaneous	20
	9.01	 	Compliance with Bermuda law	20
	9.02	 	Amendments and Waivers	20

    	 

    	

    

	9.03	 	Entire Agreement	21
	9.04	 	Term and Termination	21
	9.05	 	Notices	21
	9.06	 	Successors and Assigns; Assignment	22
	9.07	 	Specific Performance	23
	9.08	 	Submission to Jurisdiction; No Jury Trial	23
	9.09	 	Counterparts	23
	9.10	 	Governing Law	23
	9.11	 	Headings	24
	9.12	 	Construction	24
	9.13	 	Severability	24
	9.14	 	Multiple Closings; Future Capital Raises	24

    	 

    	

    

This COMMON SHAREHOLDERS’
AGREEMENT (this “Agreement”) is made as of March 25, 2014, by and among, Watford
Holdings Ltd., a Bermuda exempted company with limited liability (the “Company”), and the shareholders
of the Common Shares of the Company who acquired Common Shares on or prior to the Closing Date in connection with the offering
of Common Shares contemplated by the PPM (the “Existing Shareholders”). The Existing Shareholders and any other
shareholder of the Company who agrees in writing to become bound by this Agreement, and each of their respective successors and
permitted assignees, are collectively referred to herein as the “Shareholders” and each individually as a “Shareholder.”

 

Section 1.               
Certain
Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

 

“9.9% Holder”
means a Person whose Controlled Shares constitute 9.9% or more of the Total Voting Power.

 

“Accredited Investor”
means an “accredited investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities
Act.

 

“ACGL”
means Arch Capital Group Ltd.

 

“Affiliate”
of any Person means any other Person controlling, controlled by or under common control with such Person. As used in this definition,
“control” (including, with its correlative meanings, “controlled by” and “under common control with”)
shall mean, with respect to any Person, the possession, directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise) of
such Person. In the case of a natural Person, his or her Affiliates include members of such Person’s immediate family, natural
lineal descendants of such Person or a trust or other similar entity established for the exclusive benefit of such Person and his
or her immediate family and natural lineal descendants.

 

“Affiliate Transfer”
means (i) in the case of a Shareholder that is not a natural person, a Transfer of Common Shares from a Shareholder to an Affiliate
of such Shareholder, provided that the transferee agrees to remain an Affiliate of the transferor so long as it holds such
Common Shares or (ii) a Transfer of Common Shares from a Shareholder who is a natural person to (a) any executor, administrator
or testamentary trustee of such Shareholder’s estate if such Shareholder dies, (b) any transferee receiving Common Shares
of such Shareholder by will, intestacy laws or the laws of descent or survivorship, (c) any trustee of a trust (including an inter
vivos trust) of which there are no principal beneficiaries other than such Shareholder or one or more lineal descendents, siblings
or parents of such Shareholder or one or more lineal descendents of any siblings of such Shareholder or (d) any corporation, partnership
or other entity of which such Shareholder owns directly the majority of the outstanding equity securities or other ownership interests
or of which such Shareholder is otherwise entitled to appoint a majority of the board of directors or other managing body. “Affiliate
Transferee” shall have the corresponding meaning.

    	- 1 -

    	

    

“Agreement”
has the meaning set forth in the preamble.

 

“Arch
Designated Director” has the meaning set forth in Section 2.04(b).

 

”Arch
Entities” means, collectively, ACGL and its Affiliates. “Arch Entity” shall have the corresponding
meaning.

 

“Arch
Excepted Holder” means ACGL and any direct or indirect subsidiary of ACGL that (i) is treated as a corporation for U.S.
tax purposes, and (ii) is not a United States Person (as defined in Section 957(c) of the Code).

 

“Arch Re (Bermuda)”
means Arch Reinsurance Ltd., a Bermuda exempted company with limited liability.

 

“Arch Underwriters”
means Arch Underwriters Ltd., in its capacity as the reinsurance portfolio manager of Watford Re.

 

“Arch Underwriters
Restricted Party” means any Person that is an insurance or reinsurance competitor of Arch Underwriters or any of its
Affiliates, as determined by Arch Underwriters acting reasonably in good faith.

 

“Assignee”
has the meaning set forth in Section 3.01(j).

 

“Attribution Percentage”
means, with respect to a Shareholder and a Tentative 9.9% Holder, the percentage of such Tentative 9.9% Holder’s Controlled
Shares that are owned by such Shareholder.

 

“Board”
means the Board of Directors of the Company.

 

“Business Day”
means any day other than a Saturday, a Sunday or any day on which banks located in New York, New York or Bermuda are authorized
or obliged to close.

 

“Bye-Laws”
means the Bye-Laws of the Company, as may be amended from time to time.

 

“Closing Date”
means the date of the final closing in respect of the private placement of Common Shares described in the PPM.

 

“Code”
means the United States Internal Revenue Code of 1986, as amended.

 

“Commission”
means the United States Securities and Exchange Commission or any other federal agency administering the Securities Act.

 

“Common Shares”
means the Common Shares of the Company, with an initial par value of $0.01 per share, and includes a fraction of a Common Share.

 

“Companies
Act” means the Bermuda Companies Act 1981, as amended.

 

“Company”
has the meaning set forth in the preamble.

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“Controlled Shares”
in reference to any Person or Shareholder means all Common Shares owned by such Person or Shareholder either (i) directly, with
respect to any Person or Shareholder who is a United States person within the meaning of Section 957 of the Code, indirectly or
constructively, within the meaning of Section 958(a) or 958(b) of the Code, or (ii) beneficially within the meaning of Section
13(d)(3) of the Exchange Act.

 

“Derivative Security”
has the meaning set forth in Section 6.05(b).

 

“Director”
means any member of the Company’s Board.

 

“Election Notice”
has the meaning set forth in Section 3.02(b).

 

“Exchange Act”
means the United States Securities Exchange Act of 1934, as amended, or any similar federal statute and the rules and regulations
of the Commission promulgated thereunder, as the same may be amended from time to time.

 

“Existing
Shareholders” has the meaning set forth in the preamble.

 

“FATCA”
has the meaning set forth in Section 7.01(c).

 

“HPS Excepted
Holder” means Highbridge Capital Management LLC, Highbridge Principal Strategies LLC, employees of either of the foregoing,
any person bearing a relationship to any such employee described in Section 318(a)(1)(A) of the Code, any entity controlled by,
or trust established by, any such employee, and any person that is treated, under Section 958 of the Code, as the owner of shares
actually held by any of the foregoing.

 

“Investment Company
Act” means the United States Investment Company Act of 1940, as amended, or any similar federal statute, and the rules
and regulations of the Commission promulgated thereunder, as the same may be amended from time to time.

 

“Investment Management
Agreement” means that certain Amended and Restated Investment Management Agreement, dated as of March 24, 2014, among
the Company, Watford Re Ltd., the Investment Manager and, solely for the limited purposes set forth therein, Arch Underwriters.

 

“Investment Manager”
means Highbridge Principal Strategies LLC, in its capacity as the investment manager of the Company and Watford Re.

 

“Investment Manager
Restricted Party” means any Person that is an “asset management” competitor of the Investment Manager or
any of its Affiliates, as determined by the Investment Manager acting reasonably in good faith.

 

“IPO”
means the initial registered public offering of the Common Shares in the United States or a listing of the Common Shares on a United
States national securities exchange.

 

“J.P. Morgan”
has the meaning set forth in Section 9.05(b).

 

“New Company Securities”
has the meaning set forth in Section 6.05(b).

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“New Issue Notice”
has the meaning set forth in Section 6.05(c).

 

“Notice of Acceptance”
has the meaning set forth in Section 6.05(c).

 

“Offer Notice”
has the meaning set forth in Section 3.02(a).

 

“Officer”
means an officer of the Company from time to time during the term of this Agreement.

 

“Other Holders”
means Shareholders owning no Common Shares treated as Controlled Shares of any Tentative 9.9% Holder.

 

“Person”
means an individual, a partnership, a company, a corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization or a governmental or quasi-governmental entity or any department, agency
or political subdivision thereof.

 

“PPM”
means the Company’s Confidential Private Placement Memorandum, dated January 2014, related to the Company’s offering
of Common Shares and Preference Shares, as supplemented by the Supplement to Confidential Private Placement Memorandum dated March
14, 2014.

 

“Preference Shareholders
Agreement” means that certain Shareholders Agreement, dated on or about March 31, 2014, as amended from time to time,
among the Company and the holders of the Preference Shares.

 

“Preference Shares”
means the Preference Shares of the Company, with an initial par value of $0.01 per share.

 

“Proposed Transferee”
has the meaning set forth in Section 3.02(a).

 

“Qualified Transaction”
means (i) an IPO or (ii) a Sale Transaction.

 

“Restricted
Party” means an Investment Manager Restricted Party or an Arch Underwriters Restricted Party.

 

“Sale Price”
has the meaning set forth in Section 3.02(a).

 

“Sale Transaction”
means a sale of all or substantially all of the equity or assets of the Company or Watford Re.

 

“Securities Act”
means the United States Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations of the
Commission promulgated thereunder, as the same may be amended from time to time.

 

“Services Agreement”
means that certain Services Agreement, dated as of March 24, 2014, among the Company, Watford Re, Arch Underwriters and, solely
for the limited purposes set forth therein, the Investment Manager, as may be amended from time to time.

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“Shareholders”
has the meaning set forth in the preamble.

 

“Subscription Agreement”
means the subscription agreement, including the subscriber information form completed in connection therewith, executed by an Existing
Shareholder and the Company in connection with the issuance of the Common Shares to such Existing Shareholder.

 

“Tentative
9.9% Holder” means a Person that, but for adjustments to the voting rights of Common Shares pursuant to Section 2.03,
would be a 9.9% Holder.

 

“Total Voting Power”
means with respect to any vote taken by the Shareholders, the total votes attributable to all outstanding Common Shares entitled
to vote.

 

“Transfer”
means any direct or indirect sale, exchange, transfer (including, without limitation, any transfer by gift or operation of law,
or any transfer of an economic interest in any derivative security of any security), assignment, pledge, hypothecation, mortgage,
distribution or other disposition, or issuance or creation of any option or any voting proxy, voting trust or other transfer of
interest, in whole or in part, whether in a single transaction or a series of related transactions and whether voluntarily or involuntarily
or by operation of law or at a judicial sale or otherwise.

 

“Transfer Securities”
has the meaning set forth in Section 3.02(a).

 

“Transferring Shareholder”
has the meaning set forth in Section 3.02(a).

 

“U.S. GAAP”
means Unites States generally accepted accounting principles.

 

“Voting Cut Back
Restriction” has the meaning set forth in Section 2.03(f).

 

“Watford Re”
means Watford Re Ltd., a Bermuda exempted company with limited liability and a wholly owned subsidiary of the Company.

 

“$” means
the legal currency of the United States of America.

 

Section 2.               
Corporate
Governance.

 

2.01                               
Subsidiary
Governance. The Company and each Shareholder agree that the Board of Directors of Watford Re at the date hereof shall be
comprised of the individuals who are serving as directors on the Board in accordance with this Agreement (including pursuant
to Section 2.04) and, subject to Section 2.02, the bye-laws of Watford Re. After the date hereof, any vacancies shall be
filled in accordance with this Agreement and subject to Section 2.02, the bye-laws of Watford Re.

 

2.02                               
Bye-Law
Provisions. Each Shareholder agrees to vote its Common Shares or execute proxies or written consents, as the case may be,
and to take all other actions necessary to ensure that the Bye-Laws (a) facilitate, and do not at any time conflict with, any
provision of this Agreement and (b) permit each Shareholder to receive the benefits to which each such Shareholder is
entitled under this Agreement. The Company agrees to vote its

    	- 5 -

    	

    

common shares in Watford
Re and any other subsidiary of the Company, or execute proxies or written consents, as the case may be, and to take all other actions
necessary to ensure that the bye-laws of Watford Re and any other subsidiary of the Company (a) facilitate, and do not at any time
conflict with, any provision of this Agreement and (b) permit each Shareholder to receive the benefits to which each such Shareholder
is entitled under this Agreement.

 

2.03                            
Voting Limitation.

 

(a)            
If a Shareholder
is a Tentative 9.9% Holder with respect to any vote taken by Shareholders, then the aggregate votes conferred by the Common Shares
that constitute Controlled Shares of such Tentative 9.9% Holder shall be reduced to the extent necessary so that the Controlled
Shares of such Tentative 9.9% Holder will constitute less than 9.9% of the Total Voting Power. In applying the previous sentence,
where Common Shares held by more than one Shareholder are treated as Controlled Shares of a Tentative 9.9% Holder, the reduction
in votes shall apply to such Shareholders in accordance with their Attribution Percentages. The votes attributable to Common Shares
of all Other Holders shall, in the aggregate, be increased by the same number of votes subject to reduction as described above.
Such increase shall apply in proportion to the voting power of such Other Holders at the time, provided that such increase shall
be redistributed among the Other Holders to the extent necessary to avoid causing any such Other Holder to own Controlled Shares
with respect to a 9.9% Holder.

 

(b)            
The Board may,
by notice in writing, require any Shareholder to provide within not less than ten (10) Business Days complete and accurate
information to the registered office or such other place as the Board may designate in respect of any or all of the following
matters:

 

(i)                 
The number of
Common Shares in which such Shareholder is the legal or beneficial owner;

 

(ii)                
The Persons who
beneficially own Common Shares in respect of which such Shareholder is the registered holder;

 

(iii)             
The
relationship, association or affiliation of such Shareholder with any other Shareholder or Person, whether by means of common
control or ownership or otherwise; or

 

(iv)              
Any other facts
or matters which the Board may consider relevant to the determination of the number of Controlled Shares attributable to any Person.

 

(c)            
If any
Shareholder does not respond to any notice given pursuant to Section 2.03(b) hereof within the time specified therein or the
Board shall have reason to believe that any information provided in relation thereto is incomplete or inaccurate, the Board
may determine that the votes attaching to any Common Shares registered in the name of such Shareholder shall be disregarded
for all purposes until such time as a response (or additional response) to such notice reasonably satisfactory
to the Board has been received as specified therein.

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(d)            
With respect to
any vote taken by the Shareholders, the voting cutback provision described in Section 2.03(a) shall be applied successively as
many times as may be necessary to ensure the Controlled Shares attributable to each Tentative 9.9% Holder shall be reduced to the
extent necessary so that Controlled Shares of such Tentative 9.9% Holder will be less than 9.9% of the Total Voting Power (after
giving effect to any prior reduction in voting rights attaching to Common Shares of other Persons as provided in this Section 2.03).

 

(e)            
Notwithstanding
the provisions of this Section 2.03, having applied the provisions hereof as they consider reasonably practicable, the Board may
make such final adjustments to the aggregate number of votes attaching to the Common Shares of any Shareholder that they consider
fair and reasonable in all circumstances to ensure that no Shareholder or other Person is a 9.9% Holder (after giving effect to
any prior reduction in voting rights attaching to Common Shares of other persons as provided in this Section 2.03).

 

(f)            
The foregoing
provisions of this Section 2.03 (the “Voting Cut Back Restriction”) shall not apply to any HPS Excepted
Holder so long as the HPS Excepted Holders in the aggregate own (directly, indirectly or constructively, after application of
Section 318 of the Code as modified by Section 958 of the Code) no more than twenty percent (20%) of any class of shares then
outstanding. The Voting Cut Back Restriction shall also not apply to any Arch Excepted Holder so long as the ownership of
Common Shares or Preference Shares by such Arch Excepted Holder does not result in any person being treated as a
“United States Shareholder” (within the meaning of Section 951(b) of the Code) of the Company or any of its
subsidiaries; provided, that, if the Voting Cut Back Restriction does apply to an Arch Excepted Holder, the
voting right of such Arch Excepted Holder shall be restricted only to the extent sufficient to cause the Person not to be
treated as a United States Shareholder.  Each HPS Excepted Holder and Arch Excepted Holder agrees to provide such
information as the Company may reasonably request in order to determine share ownership.

 

2.04                             
Board of
Directors.

 

(a)            
The Board shall
initially be comprised of seven Directors and the number of Directors shall not be changed except in accordance with this Agreement,
the Bye-Laws and the Certificate of Designation relating to the rights of the holders of the Preference Shares. Each Director shall
be entitled to one vote.

 

(b)            
Arch Re
(Bermuda) shall be entitled to designate two individuals to serve as Directors on the Board (each, an “Arch
Designated Director”); provided, however, that from and after the earlier to occur of the date that (i) the
Services Agreement is terminated and (ii) the number of Common Shares, in the aggregate, that Arch Entities own is less than
seventy-five percent (75%) of the number of Common Shares owned by Arch Entities as of the Closing Date (as adjusted for
stock splits, stock dividends or similar events), the number of Arch Designated Directors which Arch Re (Bermuda) shall be
entitled to designate and have serve on the Board shall be reduced from two to one; provided, further, that the right
of Arch Re (Bermuda) to designate Arch Designated Directors shall terminate on the date that (x) if the Services Agreement is
then in effect, the number of Common Shares, in the aggregate, that Arch Entities own is less than fifty percent (50%)
of the number of Common Shares owned by Arch Entities as of the Closing Date (as adjusted for stock splits, stock dividends or
similar events),

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and (y) if the Services Agreement
is not then in effect, the number of Common Shares, in the aggregate, that Arch Entities own either (A) is less than fifty percent
(50%) of the number of Common Shares owned by Arch Entities as of the Closing Date (as adjusted for stock splits, stock dividends
or similar events), or (B) comprises less than 5% of the Company’s outstanding Common Shares.

 

(c)            
For so long as
Arch Re (Bermuda) is entitled to designate at least one Arch Designated Director:

 

(i)             
the affirmative
vote of at least one Arch Designated Director shall be required for the Board to take any of the following actions:

 

(A)               
increase the
number of members of the Board;

 

(B)               
form or create
any subsidiaries or branches of the Company;

 

(C)               
change the name
of the Company or any of its subsidiaries; or

 

(D)               
appoint, remove
or replace the Chief Executive Officer or Chief Risk Officer of the Company or any of its subsidiaries; and

 

(ii)              
Arch Re
(Bermuda) will be entitled to have at least one Arch Designated Director on each committee of the Board; provided that upon
the consummation of the earlier to occur of (x) an IPO and (y) the initial registered public offering of the Preference
Shares in the United States or a listing of the Preference Shares on a United States national securities exchange, the Arch
Designated Director on any Board committee that is subject to independence requirements for membership on such committee
under the Exchange Act or the rules and regulations of the national securities exchange on which the Common Shares and/or
Preference Shares are listed shall be a person that satisfies such independence requirements.

 

Notwithstanding clause (i)(D)
above, upon the consummation of an IPO, the affirmative vote of at least one Arch Designated Director shall no longer be required
to appoint, remove or replace the Chief Risk Officer of the Company or any of its subsidiaries.

 

(d)            
The Arch
Designated Directors shall not be entitled to vote upon any matters before the Board that relate to (i) the Services
Agreement or any other matters directly and primarily affecting an Arch Entity in a capacity other than as a Shareholder or
Director or (ii) the termination of the Investment Management Agreement, or any amendments to the fee arrangements contained
therein.

 

(e)            
An Arch
Designated Director may be removed (i) at any time without cause by Arch Re (Bermuda) or (ii) for cause (as such term is
defined in the Bye-Laws) in accordance with the Bye-Laws. If, following election to the Board, any Arch Designated Director resigns, is removed, or is unable
to serve for any reason prior to the expiration of his or her term as a Director, then, subject to the other provisions of this
Section 2.04 and applicable

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laws, Arch Re (Bermuda) shall
be entitled to designate a replacement. If Arch Re (Bermuda) is entitled to designate a person to fill any directorship and Arch
Re (Bermuda) fails to do so, then such directorship shall remain vacant until filled by Arch Re (Bermuda) in accordance with this
Section 2.04.

 

(f)            
Each Arch
Designated Director shall be entitled to (i) the same indemnification in connection with his or her role as a Director as the
other members of the Board and (ii) reimbursement for documented, reasonable out-of-pocket expenses incurred in attending
meetings of the Board, or any committee thereof, to the same extent as the other members of the Board. As between the
Company, on the one hand, and Arch Re (Bermuda), on the other hand, the Company shall, in all events, be the full indemnitor
of first resort and shall not be entitled to any contribution, indemnification or other payment by or from Arch Re (Bermuda).
The Company shall be required to advance the full amount of expenses incurred by each Arch Designated Director and shall be
liable for the full amount of all expenses and liabilities to the extent legally permitted and as required by the terms of
the organizational documents of the Company (and any other agreement regarding indemnification between the Company and any
Arch Designated Director), without regard to any rights an Arch Designated Director may have against Arch Re (Bermuda). The
Company further agrees that no advancement or payment by the Company on behalf of any Arch Designated Director with respect
to any claim for which such Designated Director has sought indemnification from the Company shall affect the foregoing and
the Company shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of
the rights of recovery of such Arch Designated Director against the Company.

 

Section 3.               
Transfers of Securities.

 

3.01                             
Restrictions
on Transfer.

 

(a)            
Prior to the
earlier to occur of the fifth (5th) anniversary of the date hereof and, if the Company consummates an IPO, the
expiration of any lockup period with respect to the Common Shares in connection therewith, no Shareholder shall Transfer all
or any part of the Common Shares owned by it without the prior written consent of the Board, which consent may be given or
withheld in the sole discretion of the Board, to any other Person. Notwithstanding the foregoing, prior to the earlier to
occur of the fifth (5th) anniversary of the date hereof and, if the Company consummates an IPO, the first
anniversary of such IPO, no Shareholder that is an Arch Entity shall Transfer (other than to another Arch Entity or in
connection with a tender offer made to all Shareholders) all or any part of the Common Shares owned by it or any other Arch
Entity as of the date hereof without the prior written consent of the Board, which consent may be given or withheld in the
sole discretion of the Board, to any other Person. The Shareholders hereby acknowledge that, although it is in the sole
discretion of the Board to give or withhold any such consent required by this Section 3.01(a), the Company’s intent is
that, before the third (3rd) anniversary of the date hereof, the Board will not approve any Transfer that is not
an Affiliate Transfer.

 

(b)            
Prior to the
consummation of an IPO and the expiration of any lockup period with respect to the Common Shares in connection therewith, no
Transfer of Common Shares shall be permitted unless (i) the Board determines in its sole discretion that such

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Transfer: (A) would not violate
the Securities Act or any state securities or “blue sky” laws applicable to the Company or the Common Shares to be
transferred; (B) has been approved, if necessary, by the Bermuda Monetary Authority; (C) would not result in the Common Shares
being held by 2,000 or more persons who are Accredited Investors or otherwise cause the Company to become subject to the reporting
requirements under Section 12 of the Exchange Act; (D) would not cause the Company to become subject to registration as an investment
company under the Investment Company Act; and (E) would not have any other material adverse legal, tax or regulatory effect on
the Company; and (ii) the Shareholder that proposes to Transfer Common Shares delivers, at the Board’s request, an opinion
of counsel which, to the Board’s reasonable satisfaction, is knowledgeable in securities law matters to the effect that such
Transfer may be effected without registration of such Common Shares under the Securities Act.

 

(c)            
The Board shall
act by majority vote; provided, however, that until the earliest to occur of (i) the seventh anniversary of the date hereof, (ii)
the consummation of an IPO and (iii) the date on which the Investment Manager is no longer serving as manager of the Company’s
investments or Arch Underwriters is no longer serving as manager of the Company’s reinsurance portfolio, as applicable, (x)
the Investment Manager’s consent will be required for any proposed transfer that would result in an Investment Manager Restricted
Party owning more than 20% of the Common Shares of the Company (or increasing its position to an amount greater than 20%) and (y)
Arch Underwriters’ consent will be required for any proposed transfer that would result in an Arch Underwriters Restricted
Party owning more than 20% of the Common Shares of the Company (or increasing its position to an amount greater than 20%).

 

(d)           
The Board may
condition any Transfer upon receipt of such information, representations, warranties, covenants and indemnities from the
transferor and transferee as the Board may determine in its sole discretion.

 

(e)            
If the Board
in good faith concludes that any applicable conditions in Section 3.01(b) have been satisfied, then it shall not withhold its
consent to (i) any Affiliate Transfer, or (ii) any other Transfer occurring after the fifth anniversary of the date hereof,
if such Transfer involves at least 100,000 Common Shares (or, if less, the transferor’s entire holding of Common
Shares).

 

(f)            
In the event of
any purported or attempted Transfer that does not comply with the provisions of this Agreement, the attempted Transfer shall be
null and void ab initio and will confer no rights whatsoever on the purported transferee as against the Company or any other
shareholder of the Company, including the Shareholders, and the Company shall not record such Transfer on its books or treat any
purported transferee of such Common Shares as the owner of such Common Shares for any purpose.

 

(g)            
Notwithstanding anything contained herein to the contrary, following an IPO of the Company, in addition to any lockup
period required by the underwriters, the Board may impose Transfer restrictions on Common Shares to ensure that no such
Transfer would (i) cause the Company to become subject to registration as an investment company under the Investment Company
Act or (ii) have any other material adverse legal, tax or regulatory effect on the Company.

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(h)            
Notwithstanding
anything contained herein to the contrary, prior to the consummation of an IPO, any transferee of Common Shares who is not a Shareholder
(other than the Company) and has acquired such Common Shares from a Shareholder shall upon the consummation of, and as a condition
to, such Transfer execute and deliver to the Company a transfer agreement and an instrument substantially in the form attached
hereto as Exhibit A (or a counterpart to this Agreement) pursuant to which such transferee agrees to be bound by the terms
of this Agreement as a Shareholder, with such rights of the transferor that are assigned by the transferor in compliance with this
Section 3.01.

 

(i)            
Expenses of
Transfer. The transferring Shareholder agrees that it will pay all expenses, including attorneys’ fees and fees in
connection with the evaluation of the transfer pursuant to this Section 3.01, incurred by the Company in connection with any
attempted or realized Transfer of all or any portion of its interest, whether or not the Board consents to such Transfer.
Such costs generally will include the amount of any transfer taxes due as a result of a Shareholder’s Transfer and the
costs of accounting for such Transfers, including for applicable tax purposes.

 

(j)            
Indemnification
by Transferor. In the event that the Company or any member of the Board becomes involved in any capacity in any action,
proceeding, or investigation brought by or against any Person (including any Shareholder) in connection with any Transfer by
a Shareholder of a Shareholder’s interest in the Company or the admission into the Company as a Shareholder of any
purchaser, assignee, transferee, donee, heir, legatee, distributee or other recipient (each, an
“Assignee”) of such transferring Shareholder’s interest in the Company, the Shareholder who has
transferred all or any portion of its interest in the Company will periodically reimburse each of the Company and the members
of the Board for each of their legal and other expenses (including the cost of any investigation and preparation) incurred in
connection with such action, proceeding or investigation. To the fullest extent permitted by law, the transferring
Shareholder also will indemnify the Company and the members of the Board for any losses, claims, damages, or liabilities to
which any of them may become subject in connection with such Transfer. The reimbursement and indemnity obligations of the
transferring Shareholder under this Section 3.01(j) shall be in addition to any liability that the transferring Shareholder
may otherwise have, shall extend upon the same terms and conditions to the partners, employees, stockholders, members,
managers, and controlling Persons of the Company, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the members of the Board and any such Persons. The
obligations of a transferor under the foregoing provisions shall survive the Transfer of its interest or any termination of
this Agreement.

 

(k)          
Recognition of Transfer. The Company shall not recognize for any purpose any purported Transfer of all or any
portion of the interest in the Company of a Shareholder unless (i) the provisions of Section 3.01 hereof shall have been
complied with, and (ii) there shall have been filed with the Company a dated notice of such Transfer, in form satisfactory to
the Company, executed and acknowledged by both the transferring Shareholder and the Assignee and such notice (A) contains the
acceptance by the Assignee of all the terms and provisions of this Agreement and the Assignee’s agreement to be bound
thereby, (B) represents that such Transfer was made in accordance with all applicable laws and regulations,

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and (C) contains a power
of attorney authorizing the Company to execute this Agreement on behalf of the Assignee.

 

(l)            
The Board may
delegate its responsibilities pursuant to this Section 3.01 to a committee of the Board and if the Board so delegates, all
references to the “Board” in this Section 3.01 shall be deemed to refer to such committee.

 

3.02                            
Other
Restrictions on Transfers.

 

(a)            
If a Shareholder
intends to Transfer any of its Common Shares (such transferring Shareholder, the “Transferring Shareholder”),
such Transferring Shareholder shall give written notice (an “Offer Notice”) to the Company stating the Transferring
Shareholder’s bona fide intention to make such a Transfer, describing in reasonable detail the proposed Transfer, including
the identity of the proposed transferee (the “Proposed Transferee”), the number of Common Shares proposed to
be Transferred pursuant to the offer (the “Transfer Securities”), and specifying the bona fide per share purchase
price that the Proposed Transferee has agreed to pay for the Transfer Securities (the “Sale Price”), which Sale
Price shall be payable in cash at the closing of the transaction.

 

(b)            
Upon receipt of
the Offer Notice, the Company shall have the exclusive option to purchase, upon delivery of a notice (the “Election Notice”)
to the Transferring Shareholder within thirty (30) days of its receipt of the Offer Notice, all or any portion of the Transfer
Securities. The Company shall deliver an Election Notice to the Transferring Shareholder of its election to purchase or not purchase
any such Transfer Securities within such thirty (30) day period, together with the payment to the Transferring Shareholder of the
Sale Price therefor (in the event that the Company so elects to purchase any Transfer Securities). If the Company elects to purchase
the Transfer Securities, the Transfer of any Transfer Securities shall be consummated as soon as practicable after delivery of
the Election Notice, but in no event later than fifteen (15) Business Days after the delivery of the Election Notice.

 

(c)            
In the event
that less than all of the Transfer Securities have been acquired by the Company, the Transferring Shareholder may, no later
than 90 calendar days after the expiration of the applicable election period set forth in Section 3.02(b), Transfer the
Transfer Securities not purchased by the Company to the Proposed Transferee at a price no less than the price per share
specified in the Offer Notice and on other terms in the aggregate no more materially favorable to the Proposed Transferee
than offered to the Company in the Offer Notice, provided that the Board has approved the Transfer to the Proposed Transferee
in accordance with Section 3.01. It shall be a condition precedent to the consummation of any Transfer of Transfer Securities
to a Person not a party to this Agreement that such Person agrees in writing to be bound by the terms and conditions of this
Agreement pursuant to an instrument substantially in the form attached hereto as Exhibit A (or a counterpart to this
Agreement). Any Transfer Securities not Transferred to the Proposed Transferee within such 90-day period shall be re-offered
(without obligation to purchase) to the Company under this Section 3 prior to any subsequent Transfer pursuant to the terms
of this Section 3.

 

(d)            
This Section
3.02 shall terminate upon consummation of an IPO.

    	- 12 -

    	

    

3.03                              
Legend.
In addition to any other legend that may be required, each certificate for Common Shares, if any, issued to any Shareholder
shall bear a legend in substantially the following form:

 

“THE SHARES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), UNDER APPLICABLE U.S. STATE SECURITIES LAWS OR UNDER THE LAWS OF ANY OTHER JURISDICTION, AND MAY BE RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY (A) TO PERSONS WHO ARE “ACCREDITED INVESTORS” WITHIN THE MEANING OF RULE 501(a) OF REGULATION
D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT, (B) IF SUCH SALE, PLEDGE OR TRANSFER
HAS RECEIVED THE CONSENT OF THE COMPANY’S BOARD OF DIRECTORS (OR A COMMITTEE THEREOF), (C) IN ACCORDANCE WITH APPLICABLE
LAWS, AND (D) TO A TRANSFEREE WHO AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND.

 

THE SHARES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO THE COMPANY’S BYE-LAWS AND A COMMON SHAREHOLDERS’ AGREEMENT DATED MARCH 25, 2014
(AS MAY BE AMENDED FROM TIME TO TIME). A COPY OF SUCH BYE-LAWS AND COMMON SHAREHOLDERS’ AGREEMENT WILL BE FURNISHED WITHOUT
CHARGE BY THE CORPORATION TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”

 

If any Common Shares are
certificated and cease to be subject to any and all restrictions on Transfer set forth in the Bye-Laws or this Agreement, the Company,
upon the written request of the holder thereof, shall issue to such holder a new certificate evidencing such Common Shares without
reference in the above legend to the Bye-Laws or to this Agreement, as the case may be.

 

Section 4.             
Additional
Liquidity Rights.

 

4.01                              
Additional
Liquidity Rights.

 

(a)            
In the event
that the Company has not, by the fifth (5th) anniversary of the date hereof, consummated an IPO, then, subject to
compliance with the Companies Act, the Company will annually make a tender offer to purchase in the first quarter of each
annual period, on a pro rata basis among all holders of Common Shares, up to 20% of the then outstanding Common Shares for a
price equal to book value per Common Share (as of the end of the fiscal quarter immediately preceding the commencement of the
tender offer) until an IPO or a Sale Transaction is consummated. Notwithstanding the foregoing, the Company will not be required to make any such repurchases (x) if
the Board determines that such repurchases will have a negative effect on any of the Company’s then outstanding ratings,
(y) unless all necessary

    	- 13 -

    	

    

regulatory authorities have
approved the repurchases (and the Company shall use commercially reasonable efforts to obtain any such approvals), and (z) unless
the Board determines that after giving effect to the repurchases, the Company has sufficient capital to conduct its business.

 

(b)            
If an initial
registered public offering of the Preference Shares in the United States or a listing of the Preference Shares on a United
States national securities exchange has not been consummated by the fifth (5th) anniversary of the date of the
Preference Shareholders Agreement, the Preference Shareholders Agreement will obligate the Company, subject to compliance
with the Companies Act, to annually make a tender offer to repurchase up to 20% of the then outstanding Preference Shares for
a price equal to book value per Preference Share on substantially the same terms as set forth above with respect to the
Common Shares. In the event that the Board determines that less than 20% of the Common Shares and Preference Shares may be
repurchased, any such reduced percentage of Common Shares and Preference Shares shall be repurchased on a pro rata basis.

 

Section 5.               
Periodic
Information Reporting Requirements.

 

5.01                            
Quarterly
Financial Statements. The Company shall prepare condensed, consolidated financial statements for each of the first three
fiscal quarters of each fiscal year in accordance with U.S. GAAP consistently applied. The Company shall provide such
quarterly financial statements to each Shareholder not later than 45 days after the end of each fiscal quarter.
Notwithstanding the foregoing, so long as the Company’s financial information is consolidated into the financial
information of ACGL, the Company shall provide quarterly financial statements to Arch Re (Bermuda) on such earlier date as
may be necessary to enable ACGL to comply with its reporting obligations as a public company.

 

5.02                            
Annual
Financial Statements. The Company shall prepare consolidated financial statements for each fiscal year in accordance with
U.S. GAAP consistently applied and shall cause such financial statements to be audited. The Company shall provide such
audited financial statements and the auditor’s report thereon to the Shareholders not later than 120 days after the end
of each fiscal year. Notwithstanding the foregoing, so long as the Company’s financial information is consolidated into
the financial information of ACGL, the Company shall provide annual financial statements to Arch Re (Bermuda) on such earlier
date as may be necessary to enable ACGL to comply with its reporting obligations as a public company.

 

5.03                            
Additional
Information. If a Shareholder requests in writing information about the Company or its subsidiaries in addition to the
financial statements made available pursuant to Sections 5.01 and 5.02 in order to, among other things, comply with
disclosure requirements under laws and regulations applicable to such Shareholder or to meet the tax reporting requirements
of such Shareholder, the Company shall use its commercially reasonable efforts to provide such additional information to such
Shareholder as soon as practicable after such written request has been received; provided, however, that,
except with respect to additional information requested by Shareholders that are Arch Entities which information is necessary
or advisable to enable ACGL to comply with its reporting obligations as a public company, the Company shall not be required
to provide any such additional information if the Company reasonably believes that the disclosure of such information could
have a 

    	- 14 -

    	

    

materially adverse effect on the financial
condition, business or prospects of the Company on a consolidated basis or is of a confidential nature.

 

5.04                            
Confidentiality.
Except as authorized in writing by the Company, each of the Shareholders shall not disclose any of the information provided
to such Shareholder pursuant to this Section 5 to any Person that is not a director, officer, partner, member, trustee,
employee, representative (including any accountant, attorney or other professional) or Affiliate of such Shareholder or a
party to this Agreement, and each Shareholder shall use its commercially reasonable efforts to cause its directors, officers,
partners, members, trustees, employees, representatives and Affiliates not to disclose such information to any Person that is
not a party to this Agreement; provided, however, that such Shareholder shall not be prohibited from
disclosing any such information if such information (w) becomes publicly available through no breach of this Agreement by the
Shareholder or its directors, officers, partners, members, trustees, employees, representatives or Affiliates, (x) is
required to be disclosed by law or the rules of a national securities exchange, (y) is required to be furnished to a
governmental agency in connection with any legal or administrative proceeding or (z) the information is requested by a
prospective transferee or purchaser of Common Shares so long as such third party enters into a confidentiality agreement with
the Company reasonably satisfactory to the Company. Notwithstanding the foregoing, (i) prospective investors (and their
agents) are authorized, without restriction of any kind, to disclose the tax treatment and tax structure of the transactions
set forth or contemplated herein and (ii) each Shareholder that is an Arch Entity is authorized, without restriction of any
kind, to disclose information provided to such Shareholder to ACGL and, the Company acknowledges that ACGL may further
disclose such information as may be necessary or advisable to enable ACGL to comply with its reporting obligations as a
public company.

 

Section 6.               
Certain Sale and Other Requirements; Certain Preemptive Rights.

 

6.01                            
Recapitalization. In anticipation of a Qualified Transaction, the Company shall be entitled to require all
Shareholders to participate in any recapitalization or restructuring transaction in connection with which the Common Shares
are converted into new securities (which shall not be disproportionately adverse in any material respect to any Shareholder),
whether in connection with a Qualified Transaction of a successor to the Company, any part of the Company, or otherwise; provided that
the rights and obligations of the Shareholders shall apply (without any material change) with respect to any successor entity
resulting from such recapitalization or restructuring transaction.

 

6.02                            
Certain
Restrictions. Without the prior approval of the Board and the Investment Manager or Arch Underwriters (as applicable),
until the earliest to occur of (i) the seventh anniversary of the date hereof, (ii) the consummation of an IPO and (iii) the
date on which the Investment Manager is no longer serving as manager of the Company’s investments or Arch Underwriters
is no longer serving as manager of the Company’s reinsurance portfolio, as applicable, the Company shall not, and shall
not permit any of its subsidiaries to, directly or indirectly, (i) sell, transfer or otherwise convey all or substantially
all of the assets or capital stock of the Company or any of its subsidiaries to a Restricted Party or (ii) effect any
transaction which results in a Restricted Party owning more than (or increasing its ownership

    	- 15 -

    	

    

percentage above) twenty
percent (20%) of the outstanding Common Shares of the Company or any of its subsidiaries.

 

6.03                            
Regulatory
Repurchase.

 

(a)            
Each Shareholder
acknowledges that (i) future dispositions and other changes in the business or assets of the Company or its subsidiaries or changes
in the law could result in the Company potentially becoming an “investment company” as defined under the Investment
Company Act and (ii) it may become necessary or advisable for the Company to take certain actions (A) in order for the Investment
Manager to comply with the Bank Holding Company Act of 1956, as amended (the “BHCA”), the Dodd-Frank Wall Street
Reform and Consumer Protection Act or any other current or future laws, rules, regulations or legal requirements applicable to
the Investment Manager or its affiliates (including JPMorgan Chase & Co. and its affiliates (“JPMorgan”))
or (B) to reduce or eliminate the impact or applicability to the Company of any bank regulatory restrictions that might otherwise
be imposed upon the Company as a result of JPMorgan’s status as a bank holding company under the BHCA.

 

(b)            
If the Board
determines that the Company is or could become an “investment company” as defined under the Investment Company
Act and that the Company will seek to qualify for the exemption from registration under Section 3(c)(7) of the Investment
Company Act, then:

 

(i)               
the Company
shall have the right to request from each Shareholder, and such Shareholder agrees to promptly provide to the Company, such
additional information, representations, warranties as the Company in good faith requests in order to determine whether such
Shareholder is a “qualified purchaser,” as defined in Section 2(a)(51)(A) of the Investment Company Act or a
similar concept as a result of changes in the law; and

 

(ii)               
if the Company
determines that a Shareholder is not a “qualified purchaser” or lacks such other relevant status pursuant to a change
in law, the Company shall have the right to repurchase all of the Common Shares owned by such Shareholder at a price equal to the
fair market value thereof (which may be based on book value or such other method as determined in good faith by the Board).

 

(c)            
If the Board
determines that it is necessary or advisable that a Shareholder cease to be a Shareholder in order to comply with the BHCA,
the Dodd-Frank Wall Street Reform and Consumer Protection Act or any other current or future laws, rules, regulations or
legal requirements applicable to JPMorgan or to reduce or eliminate the impact or applicability to the Company of any bank
regulatory restrictions that might otherwise be imposed upon the Company as a result of JPMorgan’s status as a bank
holding company under the BHCA, the Company shall have the right, subject to compliance with the Companies Act, to repurchase
all of the Common Shares owned by such Shareholder at a price equal to the fair market value thereof (which may be based on
book value or such other method as determined in good faith by the Board).

 

(d)            
Each Shareholder
agrees to provide the Company any information that the Company may reasonably request or require in order to comply with applicable
United

    	- 16 -

    	

    

States or non-United
States laws, including tax laws, or to reduce any United States or non-United States tax that may be imposed on the Company
or any investor in the Company’s securities. In addition, each Shareholder agrees to update such information if and when
any such information is no longer true or correct and to provide any additional true and correct information required pursuant
to any change in law, or the application or interpretation thereof. If a Shareholder does not provide (or appropriately update)
any such true and correct information with respect to the Company, the Company may repurchase, subject to compliance with the Companies
Act, such Shareholder’s entire interest at a price equal to the fair market value thereof (which may be based on book value
or such other method as determined in good faith by the Board).

 

6.04                            
Exchange
Act. Prior to the consummation of an IPO, in the event there are 500 or more record holders of the Common Shares as of
the end of any fiscal year, each Shareholder agrees to certify to the Company its continued status as an Accredited Investor
as of the end of such fiscal year, to the extent reasonably requested by the Company.

 

6.05                            
Preemptive
Rights.

 

(a)            
The Company
hereby grants to Arch Re (Bermuda), on behalf of each Shareholder that is an Arch Entity, the right to purchase up to the
Arch Entities’ aggregate pro rata share on a fully diluted as converted basis of all New Company
Securities (as defined below) that the Company may, from time to time prior to the first day following an IPO, propose to
issue, offer or sell, in order to permit the Arch Entities, collectively, to maintain their then-current aggregate percentage
ownership of the Company’s equity capital. The “pro rata share” of an Arch Entity for purposes of this
Section 6.05 shall be expressed as a fraction, (i) the numerator of which is the number of Common Shares held by such Arch
Entity on the date of the Company’s written notice pursuant to Section 6.05(c) hereof, and (ii) the denominator of
which is the number of Common Shares outstanding on the date of the Company’s written notice pursuant to Section
6.05(c) hereof, assuming for this purpose conversion or exercise of all outstanding Derivative Securities.

 

(b)            
“New
Company Securities” means (i) any Common Shares, preferred shares or other equity securities of the Company,
whether now authorized or not, issued after the date hereof; and (ii) any options, warrants, convertible notes, or similar
rights issued after the date hereof that are or may become convertible into or exercisable or exchangeable for, or that carry
rights to subscribe for, any equity securities of the Company (each, a “Derivative Security”); provided,
however, that the term “New Company Securities” does not include (a) securities issued as consideration to
effect the acquisition of another entity by the Company pursuant to a merger, consolidation, amalgamation, exchange of
shares, the purchase of all or substantially all of the assets, or otherwise, approved by the Board (including the
affirmative vote of at least one Arch Designated Director); (b) options issued to any directors or employees of the Company
or any of its subsidiaries pursuant to any incentive stock plan or other form of incentive compensation approved by the Board
or by the compensation committee thereof (in each case, including the affirmative vote of at least one Arch Designated
Director), whether now authorized or not, and any Common Shares issued upon the exercise thereof; (c) Common Shares issued upon the exercise of or
conversion of any Derivative Security that is outstanding on the date hereof; (d) Common Shares or other securities issued upon
the exercise

    	- 17 -

    	

    

or conversion of any Derivative
Security as to which a New Issue Notice (as defined below) has already been made; (e) Common Shares or other capital stock issued
to the Company’s Shareholders upon any stock split, stock dividend, combination or other similar event with respect to the Common
Shares or other capital stock; or (f) Common Shares, Preference Shares and Warrants issued after the date hereof and on or prior
to the Closing Date in connection with the private placements described in the PPM.

 

(c)            
In the event
that the Company proposes to undertake an issuance of New Company Securities, the Company will give Arch Re (Bermuda) written
notice (a “New Issue Notice”) of its intention, describing the type of New Company Securities, the price
and amount proposed to be issued, the other terms and conditions upon which the Company proposes to issue New Company
Securities and the persons or entities, if known, to which the New Company Securities are to be offered, issued or sold. Such
New Issue Notice shall be delivered to Arch Re (Bermuda) prior to the proposed issue date of such New Company Securities and
Arch Re (Bermuda) shall have 30 days from the date of receipt of each New Issue notice to deliver to the Company notice (a
“Notice of Acceptance”) of the amount of the applicable New Company Securities that it (or one or more
Arch Entities as determined by Arch Re (Bermuda)) intends to purchase. The acquisition by an Arch Entity of any New Company
Securities is subject in all cases to the preparation, execution and delivery by the Company and the applicable Arch Entities
of definitive documentation relating to the acquisition of such New Company Securities in form and substance reasonably
satisfactory to such Arch Entities and the Company. If Arch Re (Bermuda) delivered a Notice of Acceptance, upon the
consummation of the issuance, sale or exchange of the New Company Securities described in the related New Issue Notice, Arch
Re (Bermuda) shall cause one or more Arch Entities to acquire from the Company, and the Company shall issue to such Arch
Entities, the number or amount of New Company Securities specified in the Notice of Acceptance upon the terms and conditions
specified in the related New Issue Notice. If Arch Re (Bermuda) did not deliver a Notice of Acceptance, the Company shall
have 90 days from the date of a New Issue Notice to consummate the issuance, sale or exchange in whole or in part of the New
Company Securities described in such New Issue Notice on terms and conditions that are the same as the terms and
conditions described in the New Issue Notice or less favorable to the purchaser of such New Company Securities than the terms
and conditions described in the New Issue Notice. For avoidance of doubt, (i) upon expiration of such 90 day period, or
(ii) if Arch Re (Bermuda) did not deliver a Notice of Acceptance and the terms and conditions of the proposed issuance
of New Company Securities are more favorable to the purchaser of such New Company Securities than those set forth in the
initial New Issue Notice, the Company shall be required to deliver another New Issue Notice in connection with the proposed
issuance of New Company Securities.

 

(d)            
The Company
shall be under no obligation to consummate any proposed sale of New Company Securities, nor shall there be any liability on
the part of the Company to any Shareholder that is an Arch Entity if the Company does not consummate a proposed sale of New
Company Securities for whatever reason, whether or not the Company shall have delivered a notice in respect thereof to the
Shareholders that are Arch Entities.

    	- 18 -

    	

    

Section 7.               
Tax
Matters.

 

7.01                            
Cooperation.

 

(a)            
Each Shareholder
agrees to provide the Company whatever information is reasonably requested by the Company on an ongoing basis for purposes of monitoring
“related person insurance income” as defined in the Code, applying the voting limitations described in Section 2.03
(and any other legitimate matter related to taxes), and monitoring compliance with the limitation on benefits provisions in the
US/Bermuda tax treaty.

 

(b)            
Each Shareholder
further agrees that such Shareholder will, upon request of the Company, provide any information or documentation, execute any forms
or documents (including a power of attorney or settlement or closing agreement) and take any further action requested by the Company
in connection with any tax matter (including in connection with a tax audit or proceeding) affecting the Company.

 

(c)            
Without
limiting the foregoing, each Shareholder further agrees that such Shareholder will, upon  request of the Company,
provide identifying information as to themselves and, as applicable, their direct and indirect owners, and to certify such
information in such form as may be reasonably requested by the Company to comply with Sections 1471-1474 of the Code
(“FATCA”), any current or future regulations, treaties, laws or agreements thereunder or official
interpretations thereof, any similar provision of law or, if applicable, any intergovernmental agreement entered into between
the United States and Bermuda. Each Shareholder further agrees to cooperate with the Company in connection with any steps the
Company may elect to take, in its reasonable discretion to ensure compliance with the foregoing, it being expressly
understood and agreed that such steps may in the Company’s discretion include a forced sale and/or repurchase of any
Shares held by a Shareholder who fails to provide such information.

 

Section 8.               
Representations
and Warranties.

 

8.01                            
Authority;
Enforceability. Each of the parties hereto hereby severally represents and warrants to each of the other parties hereto
that such party has, as applicable, the legal capacity or power and authority, corporate or otherwise, to enter into this
Agreement and to carry out each of its obligations hereunder as they may hereafter arise. Such party (in the case of parties
that are not natural persons) is duly organized, validly existing and in good standing under the laws of its jurisdiction of
organization, and the execution of this Agreement and consummation of the transactions contemplated herein have been duly
authorized by all necessary action. No other act or proceeding, corporate or otherwise, on its part is necessary to authorize
the execution of this Agreement or the consummation of any of the transactions contemplated hereby. This Agreement has been
duly executed by such party and constitutes its legal, valid and binding obligation, enforceable against it in accordance
with the terms of this Agreement, except to the extent that such enforceability may be limited by bankruptcy, insolvency,
reorganization or other laws and judicial decisions of general application relating to or affecting the enforcement of
creditors’ rights general or by general equitable principles.

 

8.02                            
No
Breach. Each of the parties hereto severally represents and warrants to each of the other parties hereto that neither the
execution of this Agreement nor the performance by such party of its obligations hereunder does or will:

    	- 19 -

    	

    

(a)            
in the case of
parties that are not natural persons, conflict with or violate its articles of incorporation, bylaws or other applicable
organizational documents;

 

(b)            
violate,
conflict with or result in the termination of, or otherwise give any other Person the right to accelerate, renegotiate or
terminate or receive any payment or constitute a default or any event of default, with or without notice, lapse of time, or
both, under the terms of, any contract or agreement to which it is a party or by which it or any of its assets or operations
are bound or affected; or

 

(c)            
constitute a
violation by such party of any law, ruling, writ, injunction, award, determination or decree of any arbitral body or court or
any agency, commission, department or body of any local, state, federal or foreign governmental, regulatory, administrative,
judicial or quasi-governmental unit, entity or authority.

 

8.03                           
Consents. Each of the parties hereto hereby severally represents and warrants to each of the other parties hereto
that no consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or
obtained by such party, other than those which have been made or obtained, in connection with (i) the execution or
enforceability of this Agreement or (ii) the consummation of any of the transactions contemplated hereby.

 

8.04                           
Investment
Representations. Each Shareholder, by executing this Agreement (or taking any other action by which such Shareholder is
deemed to have executed this Agreement) or an amendment hereto, hereby confirms the representations and warranties made by
such Shareholder hereunder and contained in the Subscription Agreement between the Company and such Shareholder.

 

Section 9.               
Miscellaneous.

 

9.01                          
Compliance
with Bermuda law. The Company shall have no obligation under the provisions of this Agreement unless and until all
approvals required from the Bermuda Monetary Authority are received.

 

9.02                          
Amendments
and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to
departure from the provisions hereof may not be given, unless the Company has obtained the written consent of the
Shareholders representing a majority of the Common Shares subject to this Agreement; provided, however, that
any such amendment or modification that (i) modifies the rights or obligations of any Arch Entity under this Agreement
(including under Sections 2.03, 2.04, 3.01(a), 5, 6.05 and this Section 9.02) that apply only to Arch Entities, (ii)
adversely affects any of the rights or obligations granted expressly to Arch Entities hereunder (and that are not granted to
all Shareholders generally) or (iii) modifies any of the related defined terms in such a way that would cause (i) or (ii) to
be affected, shall also require the written consent of each Shareholder that is an Arch Entity; provided, further,
that the consent of the Shareholders shall not be required (i) to include as a party hereto any purchaser of Common Shares
pursuant to an additional closing as contemplated by Section
9.14, (ii) to include as a party hereto any purchaser of Common Shares in connection with a Transfer of Common Shares as contemplated
by Section

    	- 20 -

    	

    

3.01 and/or Section 3.02,
and (iii) to include as a party hereto any purchaser of Common Shares pursuant to a future private placement as contemplated by
Section 9.14.

 

9.03                             
Entire
Agreement. This Agreement constitutes the entire agreement and understanding of the parties in respect of its subject
matters and supersedes all prior understandings, agreements, or representations by or among the parties, written or oral, to
the extent they relate in any way to the subject matter hereof. Except as expressly contemplated hereby, there are no third
party beneficiaries having rights under or with respect to this Agreement.

 

9.04                             
Term and
Termination. This Agreement may be terminated at any time by an instrument in writing signed by the Company and
Shareholders representing 662⁄3% of the Common Shares subject to this Agreement. This Agreement shall terminate
automatically as to any Shareholder that Transfers all of its equity securities of the Company, except as provided in Section
3.01(j). Unless sooner terminated, this Agreement shall terminate ten (10) years after the closing of an IPO, unless, at any
time within one (1) year prior to such date, all of the parties extend its duration for as many additional periods, each not
to exceed ten (10) years, as they may desire.

 

9.05                             
Notices.

 

(a)            
All notices and
other communications provided for hereunder shall be made in writing by hand-delivery, first-class mail, telecopier, e-mail, or
air courier guaranteeing overnight delivery:

 

(i)               
if by the
Company to a Shareholder (other than a Shareholder that is an Arch Entity), then to the address set forth in such
Shareholder’s Subscription Agreement or joinder in the form attached hereto as Exhibit A or to such address that
such Shareholder may subsequently notify the Company in writing,

 

(ii)               
if by the
Company to a Shareholder that is an Arch Entity, as set forth below:

 

c/o Arch Reinsurance Ltd.

100 Pitts Bay Road

Pembroke HM-08

Bermuda

 

with a copy (which shall not constitute
notice) to:

 

Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005

Attention: John Schuster

Telephone No.: 212.701.3323

Telecopier No.: 212.269.5420

    	- 21 -

    	

    

(iii)               
if by a
Shareholder to the Company, as set forth below:

 

Watford Holdings Ltd.

P.O. Box HM 2069

Hamilton, HM HX

Bermuda

 

with a copy (which shall not constitute
notice) to:

 

Clifford Chance US LLP

31 West 52nd Street

New York, New York 10019

Attention: Gary D. Boss

Telecopier No.: (212) 878-8375

Telephone No.: (212) 878-8063

 

All such notices and communications
shall be deemed to have been duly given when delivered by hand, if personally delivered; five (5) Business Days after being deposited
in the United States mail, if being mailed by first class mail; two (2) Business Days after being delivered via a next-day air
courier; when receipt is acknowledged by the recipient’s telecopier machine, if telecopied; and on the date sent by e-mail
(with confirmation of delivery) if sent during normal business hours of the recipient, and on the next Business Day if sent after
normal business hours of the recipient.

 

(b)             
Notwithstanding
Section 9.05(a)(i) or anything else in this Agreement to the contrary, each Shareholder (other than any Shareholder that is an
Arch Entity) authorizes the Company to send all reports (including tax reporting information), notices and other communications
(including but not limited to all Company reports, capital account statements, financial statements, periodic investor letters,
account balances and distributions), that the Company would otherwise provide to such Shareholder pursuant to this Agreement, the
Bye-Laws or applicable law to J.P. Morgan Securities LLC and/or its private banking and wealth management affiliates (collectively,
“J.P. Morgan”) or another third party selected by the Company for further dissemination to such Shareholder
by J.P. Morgan or such other third party. For the avoidance of doubt, the Shareholders acknowledge that J.P. Morgan is under no
obligation to, and will not, receive and disseminate any such reports, notices and other communications to any such Shareholder
following the consummation of an IPO unless otherwise agreed by the Company and J.P. Morgan.

 

9.06                             
Successors
and Assigns; Assignment. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective successors and permitted assigns. No Shareholder may assign either this Agreement or any
of its rights, interests, or obligations hereunder without the prior written consent of the Company. The Company may (a)
assign any or all of its rights and interests hereunder to one or more of its Affiliates and (b) designate one or more of its
Affiliates to perform its obligations hereunder (in any or all of which cases the Company nonetheless will remain responsible
for the performance of all of its obligations hereunder).

    	- 22 -

    	

    

9.07                             
Specific
Performance. Each party acknowledges and agrees that the other parties would be damaged irreparably if any provision of
this Agreement is not performed in accordance with its specific terms or is otherwise breached. Accordingly, each party
agrees that the other parties will be entitled to an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and its terms and provisions in any action instituted in any court of
the United States or any state thereof having jurisdiction over the parties and the matter, in addition to any other remedy
to which they may be entitled, at law or in equity.

 

9.08                             
Submission to
Jurisdiction; No Jury Trial.

 

(a)             
Each party
submits to the jurisdiction of any state or federal court sitting in New York, New York in any action arising out of or
relating to this Agreement and agrees that all claims in respect of the action may be heard and determined in any such court.
Each party agrees that a final judgment in any action so brought will be conclusive and may be enforced by action on the
judgment or in any other manner provided at law or in equity. Each party waives any defense of inconvenient forum to the
maintenance of any action so brought and waives any bond, surety, or other security that might be required of any other party
with respect thereto.

 

(b)             
THE PARTIES EACH
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER
AGREEMENTS RELATING HERETO OR ANY DEALINGS AMONG THEM RELATING TO THE TRANSACTIONS. The scope of this waiver is intended to be
all encompassing of any and all action that may be filed in any court and that relate to the subject matter of the transactions
contemplated hereby, including, contract claims, tort claims, breach of duty claims and all other common law and statutory claims.
The parties each acknowledge that this waiver is a material inducement to enter into a business relationship and that they will
continue to rely on the waiver in their related future dealings. Each party further represents and warrants that it has reviewed
this waiver with its legal counsel, and that each knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED ORALLY OR IN WRITING, AND THE WAIVER WILL APPLY TO ANY AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. In the event of an action, this Agreement may be filed as a
written consent to trial by a court.

 

9.09                             
Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

9.10                             
Governing
Law. This Agreement shall be governed by the laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule that would cause the application of the
law of any jurisdiction other than the State of New York.

    	- 23 -

    	

    

9.11                             
Headings.
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

9.12                             
Construction.
The parties have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or
burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement.
Any reference to any federal, state, local, or foreign law will be deemed also to refer to law as amended and all rules and
regulations promulgated thereunder, unless the context requires otherwise. The word “including” means
“including without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include
any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context
otherwise requires. The words “this Agreement,” “herein,” “hereof,” “hereby,”
“hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited. The parties intend that each representation, warranty, and covenant contained herein will have
independent significance. If any party has breached any representation, warranty, or covenant contained herein in any
respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the party has not breached will not detract from or mitigate the
fact that the party is in breach of the first representation, warranty, or covenant.

 

9.13                             
Severability. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. If
any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of
the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

9.14                             
Multiple
Closings; Future Capital Raises.

 

(a)            
To the extent
the Company conducts one or more additional closings in connection with the Company’s offering of Common Shares, as
contemplated by the PPM, the Company shall cause each purchaser of Common Shares pursuant to any such additional closing to
execute a Subscription Agreement with the Company, which provides, among other things, that by executing such Subscription
Agreement such purchaser will be deemed to have executed this Agreement in all respects and, upon such additional closing,
each such purchaser shall be deemed to be a party to this Agreement and an Existing Shareholder for purposes of this
Agreement as of the date of such additional closing.

 

(b)            
To the extent
the Company conducts one or more future private placements of Common Shares, the Company may cause each purchaser of Common
Shares pursuant to any such future private placement to execute a joinder substantially in the form

    	- 24 -

    	

    

attached hereto as Exhibit
A and, upon the closing of such private placement and execution and delivery of such joinder, each such purchaser shall be
deemed to be a party to this Agreement and a Shareholder, for purposes of this Agreement as of the date of such closing.

 

[REST OF PAGE DELIBERATELY LEFT BLANK]

    	- 25 -

    	

    

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first written above.

 

	 	Watford Holdings Ltd.	 
	 	 	 	 
	 	By:  	/s/ John Rathgeber	 
	 	 	Name:	 
	 	 	Title:	 

 

The purchasers of Common Shares have each executed
a Subscription Agreement with the Company, which provides, among other things, that by executing the Subscription Agreement such
purchaser is deemed to have executed this Common Shareholders’ Agreement in all respects.

    	 

    	

    

Exhibit A

 

FORM OF JOINDER TO COMMON SHAREHOLDERS’
AGREEMENT

 

This Joinder Agreement (this
“Joinder Agreement”) is made as of the date written below by
the undersigned (the “Joining Party”) in accordance with the
Common Shareholders’ Agreement dated as of March 25, 2014 (the “Shareholders’
Agreement”) among Watford Holdings Ltd. and certain other parties, as the same may be amended from time to time.
Capitalized terms used, but not defined, herein shall have the meaning ascribed to such terms in the Shareholders’ Agreement.

 

The Joining Party hereby
acknowledges, agrees and confirms that, by its execution of this Joinder Agreement, the Joining Party shall be deemed to be a
party to the Shareholders’ Agreement as of the date hereof and shall have all of the rights and obligations of, and shall
be deemed to have made all of the representations and warranties of a “Shareholder” thereunder as if it had executed
the Shareholders’ Agreement (including, without limitation, that the representations and warranties contained in Section
8 of the Shareholders’ Agreement and in Section 4 and, if applicable, Section 5 or 6, of the Subscription Agreement dated
[•], 2014, between the Company and [name of transferring shareholder]1) and all of such representations and warranties
are true and correct as of the date hereof as if such representations and warranties were made by the Joining Party. The Joining
Party hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained
in the Shareholders’ Agreement.

 

IN WITNESS WHEREOF, the
undersigned has executed this Joinder Agreement as of the date written below.

 

Date: ___________ ___, ______

 

 

	 	[NAME OF JOINING PARTY]
	 	 
	 	By:	 
	 		Name:
	 		Title:
	 		Address for Notices:

 

 

1 To be included
in connection with transfers of Common Shares.

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