Document:

EX-4.1

 

Exhibit 4.1

CERTIFICATE OF DESIGNATIONS

OF

NON-CUMULATIVE PREFERENCE SHARES, SERIES A

OF

RAM HOLDINGS LTD.

          RAM Holdings Ltd., a Bermuda exempted company (the “Company”), HEREBY CERTIFIES that, pursuant
to resolutions of the Pricing Committee of the Board of Directors (the “Board of Directors”) of the
Company adopted on December 7, 2006, a series of the Company’s duly authorized preference shares,
US$0.10 par value per share, was created and the designation, preferences and privileges, voting
rights, relative, participating, optional and other special rights, and qualifications, limitations
and restrictions of such series (the “Series A Preference Shares”), in addition to those set forth
in the Memorandum of Association (“Memorandum of Association”) and Amended and Restated Bye-laws
(as amended and restated from time to time, the “Bye-laws”) of the Company, were fixed as follows:

          SECTION 1. DESIGNATION. The distinctive serial designation of the Series A Preference Shares
is “Non-Cumulative Preference Shares, Series A.” Each Series A Preference Share shall be identical
in all respects to every other Series A Preference Share, except as to the respective dates from
which dividends thereon shall accrue, to the extent such dates may differ as permitted pursuant to
Section 5(a) below.

          SECTION 2. NUMBER OF SHARES. The authorized number of Series A Preference Shares shall be
75,000. Any Series A Preference Shares retired and cancelled 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 Series A 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. DEFINITIONS. As used herein with respect to Series A Preference Shares:

          (a) “Business Day” means any day that is not a Saturday, a Sunday or a day on which banking
institutions in New York City or Bermuda generally are authorized or obligated by law or executive
order to close.

          (b) “calculation agent” means the nationally recognized calculation agent appointed by the
Company prior to the date of any redemption notice and prior to December 15, 2016, or any successor
calculation agent appointed by the Company.

          (c) “change in tax law” has the meaning specified in Section 8(d)(1).

          (d) “Certificate of Designations” means this Certificate of Designations relating to the
Series A Preference Shares, as it may be amended from time to time.

 

 

Exhibit 4.1

          (e) “Common Shares” means the Common Shares, par value US$0.10 per share, of the Company.

          (f) “Companies Act” means the Companies Act 1981 of Bermuda.

          (g) “Dividend Payment Date” has the meaning specified in Section 5(a).

          (h) “Dividend Period” has the meaning specified in Section 5(a).

          (i) “Dividend Record Date” has the meaning specified in Section 5(a).

          (j) “Dividend Reset Date” means, for each quarterly dividend period, the first day of such
quarterly dividend period, and for the first quarterly dividend period, March 15, 2017.

          (k) “early make-whole premium” has the meaning specified in Section 8(a).

          (l) “early redemption date” has the meaning specified in Section 8(a).

          (m) “Exchange” has the meaning specified in Section 4(a).

          (n) “Exchange Offer Registration Statement” means a registration statement on the appropriate
form under the Securities Act with respect to the Exchange Shares.

          (o) “Exchange Shares” means a new issue of substantially identical Series A Preference Shares
that are registered under the Securities Act of 1933 and the Securities Exchange Act of 1934.

          (p) “H.15 Statistical Release” has the meaning specified in Section 8(a).

          (q) “Independent Investment Banker” has the meaning specified in Section 8(a).

          (r) “Junior Shares” means the Common Shares and any other class or series of share capital of
the Company that ranks junior to the Series A 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.

          (s) “LIBOR Determination Date” means, with respect to any quarterly dividend period, the
second London banking day immediately preceding the Dividend Reset Date for that quarterly dividend
period.

          (t) “Liquidation Preference” has the meaning specified in Section 7(b).

          (u) “London banking day” means any day on which commercial banks are open for general business
(including business dealings in deposits in U.S. dollars) in London, England.

          (v) “mandatory redemption date” has the meaning specified in Section 8(g).

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Exhibit 4.1

          (w) “mandatory redemption price” has the meaning specified in Section 8(a).

          (x) “MoneyLine Telerate Page” means the display on Moneyline Telerate, Inc., or any successor
service, on Telerate Page 3750 or any replacement page or pages on that service.

          (y) “Parity Shares” means the Series A Preference Shares and any other class or series of
share capital of the Company that ranks equally with the Series A Preference Shares in both the
payment of dividends (whether such dividends are cumulative or non-cumulative) and in the
distribution of assets on any liquidation, dissolution or winding-up of the Company.

          (z) “Preference Shares” means any and all series of preference shares of the Company,
including the Series A Preference Shares.

          (aa) “Quarterly Dividend Payment Date” has the meaning specified in Section 5(a).

          (bb) “Registration Default” has the meaning specified in 4(b).

          (cc) “Relevant Date” has the meaning specified in Section 6(b)(i).

          (dd) “Remaining Term” has the meaning specified in Section 8(a).

          (ee) “Semi-Annual Dividend Payment Date” has the meaning specified in Section 5(a).

          (ff) “Shelf Registration Statement” means a shelf registration statement that covers resales
of the Series A Preference Shares by the holders thereof.

          (gg) “tax event make-whole premium” has the meaning specified in Section 8(f)(1).

          (hh) “tax event redemption date” has the meaning specified in Section 8(f)(1).

          (ii) “tax event redemption price” has the meaning specified in Section 8(f)(1).

          (jj) “Taxing Jurisdiction” has the meaning specified in Section 6(a).

          (kk) “Telerate Page 3750” means the display designated on page 3750 on MoneyLine Telerate Page
(or such other page as may replace the 3750 page on the service or on such other service as may be
nominated by the British Bankers’ Association for the purpose of displaying London interbank
offered rates for U.S. Dollar deposits).

          (ll) “Three-Month LIBOR” means, with respect to any quarterly dividend period, the rate
(expressed as a percentage per annum) for deposits in U.S. dollars for a three-month period
commencing on the first day of that quarterly dividend period that appears on Moneyline Telerate
Page 3750 as of 11:00 a.m. (London time) on the LIBOR Determination Date for that quarterly
dividend period. If such rate does not appear on Moneyline Telerate Page

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Exhibit 4.1

3750, three-month LIBOR will be determined on the basis of the rates at which deposits in U.S.
dollars for a three-month period commencing on the first day of that quarterly dividend period and
in a principal amount of not less than US$1,000,000.00 are offered to prime banks in the London
interbank market by four major banks in the London interbank market selected by the calculation
agent (after consultation with the Company), at approximately 11:00 a.m. (London time) on the LIBOR
Determination Date for that quarterly dividend period. The calculation agent will request the
principal London office of each of such banks to provide a quotation of its rate. If at least two
such quotations are provided, Three-Month LIBOR with respect to that quarterly dividend period will
be the arithmetic mean (rounded upward, if necessary, to the nearest whole multiple of 0.00001%) of
the two or more quotations received. If less than two such quotes are provided, Three-Month LIBOR
with respect to that quarterly dividend period will be the arithmetic mean (rounded upward, if
necessary, to the nearest whole multiple of 0.00001%) of the rates quoted by three major banks in
New York City selected by the calculation agent (after consultation with the Company), at
approximately 11:00 a.m. (New York City time) on the first day of that quarterly dividend period
for loans in the U.S. dollars to leading European banks for a three-month period commencing on the
first day of that quarterly dividend period and in a principal amount of not less than
US$1,000,000.00. However, if fewer than three banks selected by the calculation agent to provide
quotations are quoting as described above, Three-Month LIBOR for that quarterly dividend period
will be the same as Three-Month LIBOR as determined for the previous quarterly dividend period or,
in the case of the quarterly dividend period beginning on December 15, 2016, 5.353%. The
establishment of Three-Month LIBOR for each quarterly dividend period by the calculation agent
shall (in the absence of manifest error) be final and binding.

          (mm) “Transfer Restricted Series A Preference Shares” means each Series A Preference Share
until the earliest to occur of: (1) the date on which such Series A Preference Share has been
exchanged for a freely transferable Exchange Share in the Exchange; or (2) the date on which such
Series A Preference Share has been effectively registered under the Securities Act and disposed of
in accordance with a Shelf Registration Statement.

          (nn) “Treasury Yield” has the meaning specified in Section 8(a).

          (oo) “Voting Preference Shares” means, with regard to any matter as to which the holders of
Series A Preference Shares are entitled to vote as specified in Section 9 of this Certificate of
Designations, any and all series of Parity Shares upon which like voting rights have been conferred
and are exercisable with respect to such matter.

          SECTION 4. EXCHANGE.

          (a) GENERAL. In accordance with the terms of the registration rights agreement to be dated on
December 14, 2006 between the Company and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner and
Smith Incorporated (the “Registration Rights Agreement”), the Series A Preference Shares shall be
exchangeable for Exchange Shares (the “Exchange”) following the effectiveness of an Exchange Offer
Registration Statement to be filed with the Securities and Exchange Commission under the Securities
Act of 1933. Under specified circumstances, the Company shall be required to use commercially
reasonable efforts to file a

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Exhibit 4.1

Shelf Registration Statement with the Securities and Exchange Commission under the Securities
Act of 1933.

          (b) REGISTRATION DEFAULT DIVIDEND RATE. If: (1) the Company fails to file the Exchange Offer
Registration Statement or the Shelf Registration Statement on or before the date specified for such
filing in the Registration Rights Agreement; or (2) the Exhange Offer Registration Statement or
the Shelf Registration Statement is not declared effective by the Securities and Exchange
Commission on or prior to the date specified for such effectiveness in the Registration Rights
Agreement; or (3) we fail to consummate the Exchange within 30 business days of the date specified
in the Registration Rights Agreement for effectiveness with respect to the Exchange Offer
Registration Statement; or (4) the Exchange Offer Registration Statement or the Shelf Registration
Statement is declared effective but thereafter ceases to be effective or usable in connection with
resales or exchanges of Series A Preference Shares during the periods specified in the registration
rights agreement (each such event referred to in clause (1) through (4) above, a “Registration
Default”), then, not withstanding anything to the contrary contained in Section 5 and subject to
exceptions described below, dividends will accrue on Transfer Restricted Series A Preference
Shares, with respect to the semi-annual dividend period during which the first Registration Default
occurred, on the liquidation preference amount of $1,000 per share, at an annual rate of 7.75%
(regardless of the number of Registration Defaults that may have occurred and be continuing).

     The annual dividend rate applicable to Transfer Restricted Series A Preference Shares will
increase by an additional one-quarter of one percent (0.25%) with respect to each subsequent
semi-annual dividend period until all Registration Defaults have been cured, up to a maximum
increase in the annual dividend rate for all Registration Defaults of 1% (regardless of the number
of Registration Defaults that may have occurred and be continuing).

     Following the cure of all Registration Defaults, dividends on the Series A Preference Shares
will accrue and be payable as described under Section 5 hereof. A Registration Default with
respect to a failure to file, cause to become effective or maintain the effectiveness of a Shelf
Registration Statement will be deemed cured upon consummation of the Exchange in the case of a
Shelf Registration Statement required to be filed due to a failure to consummate the Exchange
within the required time period.

          SECTION 5. DIVIDENDS.

          (a) RATE. Dividends on the Series A Preference Shares will be payable on a non-cumulative
basis, only when, as and if declared by the Board of Directors (or a duly authorized committee of
the Board of Directors) out of lawfully available funds for the payment of dividends under Bermuda
law, semi-annually in arrears (as provided below in this Section 5(a) on June 15 and December 15 of
each year (each, a “Semi-Annual Dividend Payment Date”), beginning on June 15, 2007 and ending on
December 15, 2016. These dividends will accrue with respect to a particular semi-annual dividend
period, on the liquidation preference amount of US$1,000.00 per share, at an annual rate equal to
7.500%.

          After December 15, 2016, if the Series A Preference Shares have not been redeemed or
repurchased, dividends on the Series A Preference Shares will be payable on a non-

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Exhibit 4.1

cumulative basis, only when, as and if declared by the Board of Directors (or a duly
authorized committee of the Board of Directors) out of lawfully available funds for the payment of
dividends under Bermuda law, quarterly in arrears (as provided below in this Section 5(a) on March
15, June 15, September 15 and December 15 of each year (each, a “Quarterly Dividend Payment Date”
and together with each Semi-Annual Dividend Payment Date, a “Dividend Payment Date”), beginning on
March 15, 2017. These dividends will accrue with respect to a particular quarterly dividend
period, on the liquidation preference amount of US$1,000.00 per share, at an annual rate equal to
Three-Month LIBOR plus 3.557%.

          Dividends, if so declared, that are payable on Series A Preference Shares on any Dividend
Payment Date will be payable to holders of record of Series A Preference Shares as they appear in
the register of members of the Company on the applicable record date, which shall be the 15th
calendar day before such Dividend Payment Date or such other record date fixed by the Board of
Directors (or a duly authorized committee of 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”). Any such
day that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a
Business Day.

          Each dividend period (a “Dividend Period”) shall commence on and include a Dividend Payment
Date and shall end on and include the calendar day immediately preceding the next Dividend Payment
Date (other than the initial Dividend Period, which shall commence on and include the date of
original issue of the Series A Preference Shares and will end on and include June 14, 2007,
provided that, for any Series A Preference Shares issued after such original issue date, the
initial Dividend Period for such shares may commence on and include such other date as the Board of
Directors (or a duly authorized committee of the Board of Directors) shall determine and publicly
disclose at the time such additional shares are issued).

          Dividends payable on the Series A Preference Shares in respect of any Dividend Period
commencing prior to the December 15, 2016 Dividend Payment Date will be computed on the basis of a
360-day year consisting of twelve 30-day months. The dividend payment for any period prior to the
December 15, 2016 Dividend Payment Date that is shorter than six months will be computed based on a
30-day month and, for periods of less than a month, the actual number of days elapsed in such
period, over a 360-day year. If any date on which dividends would otherwise be payable on or prior
to December 15, 2016 is not a Business Day, then the Dividend Payment Date will be the next
succeeding Business Day with the same force and effect as if made on the original Dividend Payment
Date, and no additional dividends shall accrue on the amount so payable from such date to such next
succeeding Business Day. If any date on which dividends would otherwise be payable after December
15, 2016 is not a Business Day, than the Dividend Payment Date will be the next succeeding Business
Day, unless the payment date would fall in the next calendar month, in which case the Dividend
Payment Date will be made on the next Business Day immediately before the scheduled payment date.
Dividends payable on the Series A Preference Shares in respect of any dividend period commencing on
or after the December 15, 2016 Dividend Payment Date will be computed based on the actual number of
days elapsed over a 360-day year. Dividends payable in respect of a Dividend Period shall be
payable in arrears (i.e., on the first Dividend Payment Date after such Dividend Period).

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Exhibit 4.1

          Dividends on the Series A Preference Shares shall be non-cumulative. Accordingly, if the
Board of Directors (or a duly authorized committee of the Board of Directors) does not declare a
dividend on the Series A Preference Shares payable in respect of any Dividend Period before the
related Dividend Payment Date, in full or otherwise, then such undeclared dividends shall not
cumulate and will not accrue and will not be payable and the Company shall have no obligation to
pay such undeclared dividends for the applicable Dividend Period on the related Dividend Payment
Date or at any future time or to pay interest with respect to such dividends, whether or not
dividends are declared on Series A Preference Shares or any other preference shares the Company may
issue in the future.

          Holders of Series A Preference Shares shall not be entitled to any dividends or other
distributions, whether payable in cash, securities or other property, other than dividends (if any)
declared and payable on the Series A Preference Shares as specified in this Section 5 (subject to
the other provisions of this Certificate of Designations).

          In the event that additional Series A Preference Shares are issued after the original issue
date, dividends on such Series A Preference Shares will accrue from the original issue date or from
any other date specified by the Company at the time such additional Series A Preference Shares are
issued and will accrue, with respect to each Dividend Period, in the manner set forth above in this
Section 5(a).

          (b) PRIORITY OF DIVIDENDS. So long as any Series A Preference Shares remain outstanding for
any Dividend Period, unless the full dividends for the latest completed Dividend Period on all
issued and outstanding Series A Preference Shares and any Parity Shares have been declared and paid
(or declared and a sum sufficient for the payment thereof has been set aside), (1) no dividend
shall be declared or paid on the Common Shares or any other Junior Shares (other than a dividend
payable solely in Junior Shares); and (2) no Common Shares or other Junior Shares shall be
purchased, redeemed or otherwise acquired for consideration by the Company, directly or indirectly
(other than (i) as a result of a reclassification of Junior Shares for or into other Junior Shares,
or the exchange or conversion of one Junior Share for or into another Junior Share; (ii) through
the use of the proceeds of a substantially contemporaneous sale of Junior Shares; (iii) as
permitted by the Bye-laws in effect as of the date of this Certificate of Designations and (iv) as
required by any employment contract, benefit plan or similar agreement or arrangement with or for
the benefit of one or more of the Company’s present or former employees, officers, directors or
consultants entered into prior to the date of this Certificate of Designations).

          When dividends are not paid (or declared and a sum sufficient for payment thereof set aside)
in full on any Dividend Payment Date (or, in the case of Parity Shares having dividend payment
dates different from the Dividend Payment Dates, on a dividend payment date falling within a
Dividend Period) upon the Series A Preference Shares and any Parity Shares, all dividends declared
by the Board of Directors (or a duly authorized committee of the Board of Directors) on the Series
A Preference Shares and all such Parity Shares and payable on such Dividend Payment Date (or, in
the case of Parity Shares having dividend payment dates different from the Dividend Payment Dates,
on a dividend payment date falling within the Dividend Period related to such Dividend Payment
Date) shall be declared by the Board of  Directors (or

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Exhibit 4.1

such committee of the Board of Directors) on a pro rata basis in proportion to the total
amounts that are due on such securities.

          (c) RESTRICTIONS ON PAYMENT OF DIVIDENDS. Pursuant to and subject to the Companies Act, the
Company may not lawfully declare or pay a dividend if the Company has reasonable grounds for
believing that the Company is, and would after payment of the dividend be, unable to pay its
liabilities as they become due, or that the realizable value of the Company’s assets would, after
payment of the dividend, be less than the aggregate value of the Company’s liabilities, issued
share capital and share premium accounts.

          SECTION 6. PAYMENT OF ADDITIONAL AMOUNTS.

          (a) Subject to the terms of the Companies Act, the Company will make all payments and
distributions on the Series A Preference Shares free and clear of and without withholding or
deduction at source for, or on account of, any present or future taxes, fees, duties, assessments
or governmental charges of whatever nature imposed or levied by or on behalf of Bermuda or any
other jurisdiction in which the Company is organized (a “Taxing Jurisdiction”) or any political
subdivision or taxing authority thereof or therein, unless such taxes, fees, duties, assessments or
governmental charges are required to be withheld or deducted by (x) the laws (or any regulations or
rulings promulgated thereunder) of a Taxing Jurisdiction or any political subdivision or taxing
authority thereof or therein or (y) an official position regarding the application, administration,
interpretation or enforcement of any such laws, regulations or rulings (including, without
limitation, a holding by a court of competent jurisdiction or by a taxing authority in a Taxing
Jurisdiction or any political subdivision thereof). If a withholding or deduction at source is
required in respect of any payment or distribution on the Series A Preference Shares (whether in
respect of a declared dividend, upon redemption, upon liquidation, dissolution or winding up of the
Company or otherwise), the Company will, subject to certain limitations and exceptions described
below, pay to the holders of the Series A Preference Shares such additional amounts as dividends as
may be necessary so that every net payment made to such holders, after the withholding or
deduction, will not be less than the amount provided for in this Certificate of Designations to be
then due and payable.

          (b) The Company will not be required to pay any additional amounts for or on account of:

     (i) any tax, fee, duty, assessment or governmental charge of whatever nature that would
not have been imposed but for the fact that such holder was a resident, domiciliary or
national of, or engaged in business or maintained a permanent establishment or was
physically present in, the relevant Taxing Jurisdiction or any political subdivision thereof
or otherwise had some connection with the relevant Taxing Jurisdiction other than by reason
of the mere ownership of, or receipt of payment under, such Series A Preference Shares or
any Series A Preference Shares presented for payment more than 30 days after the Relevant
Date. The “Relevant Date” means, in respect of any payment, the date on which such payment
first becomes due and payable, but if the full amount of the moneys payable has not been
received by the dividend disbursing agent on or prior to such due date, it means the first
date on which, the full amount of such moneys having been so received and being available
for payment to

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Exhibit 4.1

holders, notice to that effect shall have been duly given to the holders of the Series
A Preference Shares;

     (ii) any estate, inheritance, gift, sale, transfer, personal property or similar tax,
assessment or other governmental charge or any tax, assessment or other governmental charge
that is payable otherwise than by withholding or deduction from payment of the liquidation
preference;

     (iii) any tax, fee, duty, assessment or other governmental charge that is imposed or
withheld by reason of the failure by the holder of such Series A Preference Shares to comply
with any reasonable request by the Company addressed to the holder within 90 days of such
request (a) to provide information concerning the nationality, residence or identity of the
holder or (b) to make any declaration or other similar claim or satisfy any information or
reporting requirement, which is required or imposed by statute, treaty, regulation or
administrative practice of the relevant Taxing Jurisdiction or any political subdivision
thereof as a precondition to exemption from all or part of such tax, fee, duty, assessment
or other governmental charge;

     (iv) any withholding or deduction required to be made pursuant to any EU Directive on
the taxation of savings implementing the conclusions of the ECOFIN Council meetings of 26-27
November 2000, 3 June 2003 or any law implementing or complying with, or introduced in order
to conform to, such EU Directive; or

     (v) any combination of items (i), (ii), (iii) and (iv).

          (c) In addition, the Company will not pay additional amounts with respect to any payment on
any such Series A Preference Shares to any holder who is a fiduciary, partnership, limited
liability company or other pass-thru entity other than the sole beneficial owner of such Series A
Preference Shares if such payment would be required by the laws of the relevant Taxing Jurisdiction
(or any political subdivision or relevant taxing authority thereof or therein) to be included in
the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary
or a member of such partnership, limited liability company or other pass-thru entity or a
beneficial owner to the extent such beneficiary, partner or settlor would not have been entitled to
such additional amounts had it been the holder of the Series A Preference Shares.

          SECTION 7. LIQUIDATION RIGHTS.

          (a) VOLUNTARY OR INVOLUNTARY LIQUIDATION. In the event of any liquidation, dissolution or
winding-up of the affairs of the Company, whether voluntary or involuntary, holders of Series A
Preference Shares and any Parity Shares shall be entitled to receive, out of the assets of the
Company or proceeds thereof (whether capital or surplus) available for distribution to shareholders
of the Company, after satisfaction of all liabilities and obligations to creditors of the Company,
if any, but before any distribution of such assets or proceeds is made to or set aside for the
holders of Common Shares and any other Junior Shares, in full an amount equal to US$1,000.00 per
Series A Preference Share, plus any declared and unpaid dividends.

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Exhibit 4.1

          (b) PARTIAL PAYMENT. If in any distribution described in Section 7(a) above, the assets of
the Company or proceeds thereof are not sufficient to pay the Liquidation Preferences (as defined
below) in full to all holders of Series A Preference Shares and all holders of any Parity Shares,
the amounts paid to the holders of Series A Preference Shares and to the holders of all such other
Parity Shares shall be paid on a pro rata basis in proportion to the total amounts that are due on
such Series A Preference Shares and all such other Parity Shares but only to the extent the Company
has assets or proceeds thereof available after satisfaction of all liabilities to creditors. In
any such distribution, the “Liquidation Preference” of any holder of Preference Shares of the
Company shall mean the amount otherwise payable to such holder in such distribution (assuming no
limitation on the assets of the Company available for such distribution), including any declared
and unpaid dividends (and, in the case of any holder of shares other than Series A Preference
Shares and on which dividends accrue on a cumulative basis, an amount equal to any unpaid, accrued
cumulative dividends, whether or not declared, as applicable).

          (c) RESIDUAL DISTRIBUTIONS. If the Liquidation Preference has been paid in full to all
holders of Series A Preference Shares and any holders of Parity Shares, the holders of other shares
of the Company shall be entitled to receive all remaining assets of the Company (or proceeds
thereof) according to their respective rights and preferences.

          (d) MERGER, CONSOLIDATION AND SALE OF ASSETS NOT LIQUIDATION. For purposes of this Section 7,
the consolidation, amalgamation, merger, arrangement, reincorporation, discontinuance,
de-registration or reconstruction involving the Company or the sale, assignment, lease, conveyance
or transfer of all or substantially all of the shares or the property or business of the Company
shall not constitute a liquidation, dissolution or winding-up.

          SECTION 8. REDEMPTION.

          (a) OPTIONAL REDEMPTION.

          Prior to December 15, 2016, the Company, at its option, may redeem, in whole at any time or in
part from time to time, the Series A Preference Shares at the time issued and outstanding, upon
notice given as provided in Section 8(c) below, at a redemption price equal to the sum of (i) the
US$1,000.00 liquidation preference per Series A Preference Share plus (ii) declared and unpaid
dividends per Series A Preference Share, if any, without accumulation of any undeclared dividends
plus (iii) any applicable early make-whole premium.

          The amount of the “early make-whole premium” per Series A Preference Share to be redeemed in
accordance with the foregoing paragraph will be equal to the excess, if any, of:

     (i) the sum of the present values, calculated as of the date fixed for redemption (the
“early redemption date”), of:

     (x) each dividend payment that, but for such redemption, would have been
payable on the Series A Preference Share being redeemed on each Dividend Payment
Date occurring during the period beginning on the early redemption date and ending
on December 15, 2016, assuming for the purpose of calculating this

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Exhibit 4.1

“early make-whole premium” only that the Board of Directors of the Company (or
a duly authorized committee of the Board) had declared a dividend payable on that
Series A Preference Share on each such Dividend Payment Date; and

     (y) the mandatory redemption price (as defined below) that, but for such
redemption, would have been payable on the mandatory redemption date (as defined
below) in respect of such Series A Preference Share being redeemed; over

     (ii) the US$1,000.00 liquidation preference per Series A Preference Share being
redeemed.

          The present value of the dividend payments and mandatory redemption price referred to in
clause (i) above will be determined in accordance with generally accepted principles of financial
analysis. Such present values will be calculated by discounting the amount of each dividend
payment or mandatory redemption price from the date that such dividend payment or mandatory
redemption price would have been payable, but for the redemption, to the early redemption date at a
discount rate equal to the Treasury Yield plus 37.5 basis points.

          The Company will appoint an independent investment banking institution of national standing to
calculate the early make-whole premium; provided that Merrill Lynch, Pierce, Fenner & Smith
Incorporated will make such calculation if (i) the Company fails to make such appointment at least
30 days prior to the early redemption date, or (ii) the institution so appointed is unwilling or
unable to make such calculation. If Merrill Lynch, Pierce, Fenner & Smith Incorporated is to make
such calculation but is unwilling or unable to do so, then the calculation agent will appoint an
independent investment banking institution of national standing to make such calculation. In any
case, the institution making such calculation is referred to in this Certificate of Designations as
an “Independent Investment Banker.”

          For purposes of determining the early make-whole premium, “Treasury Yield” means a rate of
interest per year equal to the weekly average yield to maturity of United States Treasury Notes
that have a constant maturity that corresponds to the remaining term to December 15, 2016 of the
Series A Preference Shares to be redeemed, calculated to the nearest 1/12th of a year (the
“Remaining Term”). The Independent Investment Banker will determine the Treasury Yield as of the
third business day immediately preceding the applicable early redemption date.

          The Independent Investment Banker will determine the weekly average yields of United States
Treasury Notes by reference to the most recent statistical release published by the Federal Reserve
Bank of New York and designated “H.15(519) Selected Interest Rates” or any successor release (the
“H.15 Statistical Release”). If the H.15 Statistical Release sets forth a weekly average yield for
United States Treasury Notes having a constant maturity that is the same as the Remaining Term,
then the Treasury Yield will be equal to such weekly average yield. In all other cases, the
Independent Investment Banker will calculate the Treasury Yield by interpolation, on a
straight-line basis, between the weekly average yields on the United States Treasury Notes that
have a constant maturity closest to and greater than the Remaining Term and the United States
Treasury Notes that have a constant maturity closest to and less than the

11

 

Exhibit 4.1

Remaining Term (in each case as set forth in the H.15 Statistical Release). The Independent
Investment Banker will round any weekly average yields so calculated to the nearest 1/100th of a
1%, and will round upward for any figure of 1/200th of 1% or above. If weekly average yields for
United States Treasury Notes are not available in the H.15 Statistical Release or otherwise, then
the Independent Investment Banker will select comparable rates and calculate the Treasury Yield by
reference to those rates.

          On and after December 15, 2016, the Company, at its option, may redeem, in whole at any time
or in part from time to time, the Series A Preference Shares at the time outstanding, upon notice
given as provided in Section 8(c) below, at a redemption price equal to the liquidation preference
amount of US$1,000.00 per Series A Preference Share plus declared and unpaid dividends, if any,
without accumulation of any undeclared dividends.

          The redemption price for any Series A Preference Shares shall be payable on the redemption
date to the holder of such shares against book entry transfer or surrender of the certificate(s)
evidencing such shares to the Company or its agent. Any declared but unpaid dividends payable on a
redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not
be paid to the holder entitled to receive the redemption price on the redemption date, but rather
shall be paid to the holder of record of the redeemed shares on such Dividend Record Date relating
to the Dividend Payment Date as provided in Section 5 above.

          Prior to delivering notice of redemption as provided below, the Company will file with its
corporate records (which may include its minute book) a certificate signed by one of the Company’s
officers affirming the Company’s compliance with the redemption provisions under the Companies Act
relating to the Series A Preference Shares, and stating that there are reasonable grounds for
believing that the Company is, and after the redemption will be, able to pay its liabilities as
they become due. The Company will mail a copy of this certificate with the notice of any
redemption.

          (b) NO SINKING FUND. The Series A Preference Shares will not be subject to any mandatory
redemption, sinking fund, retirement fund or purchase fund or other similar provisions. Except as
provided in Section 8(g) below, holders of Series A Preference Shares will have no right to require
redemption, repurchase or retirement of any Series A Preference Shares.

          (c) NOTICE OF REDEMPTION. Notice of every redemption of Series A Preference Shares shall be
given by first class mail, postage prepaid, addressed to the holders of record of the shares to be
redeemed at their respective last addresses appearing on the register of members of the Company.
Such mailing shall be at least 30 days and not more than 60 days before the date fixed for
redemption. Any notice mailed as provided in this subsection shall be conclusively presumed to
have been duly given, whether or not the holder receives such notice, but failure duly to give such
notice by mail, or any defect in such notice or in the mailing thereof, to any holder of Series A
Preference Shares designated for redemption shall not affect the validity of the proceedings for
the redemption of any other Series A Preference Shares. Notwithstanding the foregoing, if the
Series A Preference Shares or any depositary shares representing interests in the Series A
Preference Shares are issued in book-entry form through The Depository Trust Company or any other
similar facility, notice of redemption may be given to the holders of Series A Preference Shares at
such time and in any manner permitted by such

12

 

Exhibit 4.1

facility. Each such notice given to a holder shall state: (1) the redemption date; (2) the
number of Series A Preference Shares to be redeemed and, if less than all the Series A Preference
Shares held by such holder are to be redeemed, the number of such Series A Preference Shares to be
redeemed from such holder; (3) the redemption price; and (4) that the Series A Preference Shares
should be delivered via book entry transfer or the place or places where certificates for such
Series A Preference Shares are to be surrendered for payment of the redemption price.

          (d) TAX REDEMPTION. (1) Prior to December 15, 2016, if there is a “change in tax law” that
would require the Company or any successor company to pay any additional amounts with respect to
the Series A Preference Shares on the next succeeding Dividend Payment Date, and the payment of
those additional amounts cannot be avoided by the use of any reasonable measures available to the
Company or any successor company, the Company shall be entitled at any time thereafter, upon notice
given as provided in Section 8(c) above, to redeem any or all Series A Preference Shares pursuant
to this clause for cash at a “tax event redemption price” equal to the sum of (i) 100% of the
US$1,000.00 liquidation preference per Series A Preference Share plus (ii) declared and unpaid
dividends per Series A Preference Share, if any, without accumulation of any undeclared dividends
plus (iii) any applicable tax event make-whole premium.

          The amount of the “tax event make-whole premium” per Series A Preference Share to be redeemed
in accordance with the foregoing paragraph will be equal to the excess, if any, of:

     (i) the sum of the present values, calculated as of the date fixed for redemption (the
“tax event redemption date”), of:

     (x) each dividend payment that, but for such redemption, would have been
payable on the Series A Preference Share being redeemed on each Dividend Payment
Date occurring during the period beginning on the tax event redemption date and
ending on December 15, 2016, assuming for the purpose of calculating this “tax event
make-whole premium” only that the Board of Directors of the Company (or a duly
authorized committee of the Board) had declared a dividend payable on that Series A
Preference Share on each such Dividend Payment Date; and

     (y) the mandatory redemption price (as defined below) that, but for such
redemption, would have been payable on the mandatory redemption date (as defined
below) in respect of such Series A Preference Share being redeemed; over

     (ii) the US$1,000.00 liquidation preference per Series A Preference Share being
redeemed.

          The present values of dividend payments and mandatory redemption price referred to in clause
(1) above will be determined in accordance with generally accepted principles of financial
analysis. Such present values will be calculated by discounting the amount of each dividend
payment or mandatory redemption price from the date that each such dividend payment or mandatory
redemption price would have been payable, but for the

13

 

Exhibit 4.1

redemption, to the tax event redemption date at a discount rate equal to the Treasury Yield
plus 50 basis points.

          The Independent Investment Banker will determine the Treasury Yield in the manner described in
Section 8(a).

          For the purposes of this provision, a “change in tax law” shall be (a) a change in or
amendment to laws, regulations or rulings of any jurisdiction, political subdivision or taxing
authority described in the next sentence, (b) a change in the official application or
interpretation of those laws, regulations or rulings, or (c) any execution of or amendment to any
treaty affecting taxation to which any jurisdiction, political subdivision or taxing authority
described in the next sentence is party after the date of original issuance of the Series A
Preference Shares. The jurisdictions, political subdivisions and taxing authorities referred to in
the previous sentence are (a) Bermuda or any political subdivision or governmental authority of or
in Bermuda with the power to tax, (b) any jurisdiction from or through which the Company or its
dividend disbursing agent is making payments on the Series A Preference Shares or any political
subdivision or governmental authority of or in that jurisdiction with the power to tax, or (c) any
other jurisdiction in which the Company or its successor company is organized or generally subject
to taxation or any political subdivision or governmental authority of or in that jurisdiction with
the power to tax.

          (2) Prior to December 15, 2016, if the entity formed by a consolidation, merger or
amalgamation involving the Company or the entity to which the Company conveys, transfers or leases
substantially all of its properties and assets is required to pay additional amounts in respect of
any tax, assessment or governmental charge imposed on any holder of Series A Preference Shares as a
result of a change in tax law that occurred after the date of the consolidation, merger,
amalgamation, conveyance, transfer or lease, and the payment of those amounts cannot be avoided by
the use of any reasonable measures available to the Company or any successor company, the Company
shall be entitled at any time thereafter, upon notice given as provided in Section 8(c) above, to
redeem any or all Series A Preference Shares pursuant to this clause for cash at the tax event
redemption price per share being redeemed.

          (e) PARTIAL REDEMPTION. In case of any redemption of only part of the Series A Preference
Shares at the time issued and outstanding, the 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. Subject to the
provisions hereof, the Company shall have full power and authority to prescribe the terms and
conditions upon which Series A Preference Shares shall be redeemed from time to time. If fewer
than all the shares represented by any certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without charge to the holder thereof.

          (f) MANDATORY REDEMPTION. On December 15, 2066 (the “mandatory redemption date”), the Company
shall redeem, in whole, the Series A Preference Shares at a redemption price of US$1,000.00 per
share (the “mandatory redemption price”), plus declared and unpaid dividends, without accumulation
of any undeclared dividends. The Company shall be required to deposit with a bank or trust company
sufficient funds for the

14

 

Exhibit 4.1

payment of the full amount payable upon redemption of such shares on December 15, 2066 in
accordance with Section 8(g) below.

          If and for so long as the Company fails for any reason to deposit such funds sufficient to
redeem the Series A Preference Shares on December 15, 2066, the Company and its subsidiaries will
not (i) redeem or otherwise acquire any Parity Shares or discharge any mandatory or optional
redemption, sinking fund or other similar obligation in respect of any Parity Shares (except in
connection with a redemption, sinking fund or other similar obligation in which Series A Preference
Shares receive a pro rata share) or (ii) declare or make any distribution on any Junior Shares, or
redeem or otherwise acquire any Junior Shares, or discharge any mandatory or optional redemption,
sinking fund or other similar obligation in respect of the Junior Shares.

          (g) DEPOSIT OF FUNDS FOR REDEMPTION. (1) On or prior to the date fixed for redemption of the
Series A Preference Shares or any part thereof as specified in the notice of redemption given as
provided in Section 8(c) above, the Company shall deposit adequate funds for such redemption, in
trust for the account of holders of the Series A Preference Shares, with a bank or trust company
that has an office in the United States, and that has, or is an affiliate of a bank or trust
company that has, capital and surplus of at least US$50,000,000. If the name and address of such
bank or trust company and the deposit of or intent to deposit the redemption funds in such trust
account have been stated in the redemption notice, then from and after the mailing of the notice
and the making of such deposit the Series A Preference Shares called for redemption will no longer
be deemed to be outstanding for any purpose whatsoever, and all rights of the holders of such
Series A Preference Shares in or with respect to us will cease and terminate except to the right of
the holders of the Series A Preference Shares: (i) to transfer such Series A Preference Shares
prior to the date fixed for redemption; and (ii) to receive the redemption price of such Series A
Preference Shares, including declared and unpaid dividends and any applicable make-whole premium,
without accumulation of any undeclared dividends, upon surrender of the certificate or certificates
representing the Series A Preference Shares to be redeemed.

          (2) Any moneys so deposited by the Company that remain unclaimed by the holders of the Series
A Preference Shares called for redemption will, at the end of six years after the redemption date,
be paid to the Company upon its request, after which repayment the holders of the Series A
Preference Shares called for redemption can no longer look to such bank or trust company for the
payment of the redemption price but must look only to the Company for the payment of any lawful
claim for such moneys which holders of such Series A Preference Shares may have. After such
six-year period, the right of any shareholder or other person to receive such payment may lapse
through limitations imposed in the manner and with the effect provided under the laws of Bermuda.

          (h) REDUCTION OF SHARE CAPITAL. Any redemption of Series A Preference Shares under this
Section 8 shall not be taken as reducing the amount of the Company’s authorized share capital.

15

 

Exhibit 4.1

          SECTION 9. VOTING RIGHTS.

          (a) GENERAL. The holders of Series A Preference Shares shall not have any voting rights
except as set forth below in the Bye-laws of the Company or as otherwise from time to time required
by law. Notwithstanding anything to the contrary contained in the Bye-laws of the Company, the
affirmative vote or consent of at least 66 2/3% of the issued and outstanding Series A Preference
Shares will be required for the authorization or issuance of any share capital that will rank
senior to the Series A Preference Shares as to dividends and/or distribution upon the liquidation
dissolution or winding-up of the affairs of the Company.

          (b) CHANGES FOR CLARIFICATION. Without the consent of the holders of the Series A Preference
Shares, so long as such action does not affect the special rights, preferences, privileges and
voting powers, and limitations and restrictions, of the Series A Preference Shares taken as a
whole, the Company may amend, alter, supplement or repeal any terms of the Series A Preference
Shares:

     (i) to cure any ambiguity, or to cure, correct or supplement any provision contained in
this Certificate of Designations that may be defective or inconsistent; or

     (ii) to make any provision with respect to matters or questions arising with respect to
the Series A Preference Shares that is not inconsistent with the provisions of this
Certificate of Designations.

          (c) CHANGES AFTER PROVISION FOR REDEMPTION. No vote or consent of the holders of Series A
Preference Shares shall be required pursuant to Section 9(a), (b) or (c) above if, at or prior to
the time when any such vote or consent would otherwise be required pursuant to such Section, all
outstanding Series A Preference Shares shall have been redeemed, or shall have been called for
redemption upon proper notice and sufficient funds shall have been set aside for such redemption,
in each case pursuant to Section 8 above.

          (d) PROCEDURES FOR VOTING AND CONSENTS. The rules and procedures for calling and conducting
any meeting of the holders of Series A Preference Shares (including, without limitation, the fixing
of a record date in connection herewith), the solicitation and use of proxies at such a meeting,
the obtaining of written consents and any other aspect or matter with regard to such a meeting or
such consents shall be governed by any rules the Board of Directors (or a duly authorized committee
of the Board of Directors) in its discretion, may adopt from time to time, which rules and
procedures shall conform to the requirements of this Certificate of Designations, the Memorandum of
Association, the Bye-laws, applicable law and any national securities exchange or other trading
facility on which the Series A Preference Shares is listed or traded at the time. Whether the vote
or consent of the holders of a plurality, majority or other portion of the Series A Preference
Shares and any Voting Preference Shares has been cast or given on any matter on which the holders
of Series A Preference Shares are entitled to vote shall be determined by the Company by reference
to the aggregate voting power, as determined by the Bye-laws of the Company, of the shares voted or
covered by the consent.

          SECTION 10. RANKING. The Series A Preference Shares will, with respect to the payment of
dividends and distributions of assets upon liquidation, dissolution and winding-

16

 

Exhibit 4.1

up, rank senior to Junior Shares and pari passu with any Parity Shares of the Company,
including other series of Preference Shares that the Company may issue from time to time in the
future.

          SECTION 11. RECORD HOLDERS. To the fullest extent permitted by applicable law, the Company
and the transfer agent for the Series A Preference Shares may deem and treat the record holder of
any Series A Preference Shares as the true and lawful owner thereof for all purposes, and neither
the Company nor such transfer agent shall be affected by any notice to the contrary.

          SECTION 12. NOTICES. All notices or communications in respect of Series A 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
Designations, the Memorandum of Association, Bye-laws or by applicable law.

          SECTION 13. NO PREEMPTIVE RIGHTS. No Series A 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 14. CONVERSION. Except as provided in Section 4 hereof, the Series A Preference
Shares shall not be convertible into or exchangeable for any other securities or property of the
Company.

          SECTION 15. OTHER RIGHTS. Series A Preference Shares shall not have any voting powers,
preferences or relative, participating, optional or other special rights, or qualifications,
limitations or restrictions thereof, other than as set forth herein or in the Memorandum of
Association, Bye-laws or as provided by applicable law.

          IN WITNESS WHEREOF, RAM HOLDINGS LTD. has caused this certificate to be signed by Victoria
Guest, its General Counsel and Secretary, this 14th day of December, 2006.

[Signature Page Follows]

17

 

Exhibit 4.1

	 	 	 	 	 
	 	 	RAM HOLDINGS LTD.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: Victoria Guest
	 

	 	 	 	Title: General Counsel and Secretary
	 

	 	 	 	Date:EX-4.2

 

Exhibit 4.2

FORM OF

NON-CUMULATIVE PREFERENCE SHARES, SERIES A

FACE OF SECURITY

     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT. BY ITS ACQUISITION HEREOF, THE
HOLDER AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY PRIOR TO THE DATE THAT IS TWO
YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH RAM HOLDINGS
LTD. (THE “COMPANY”) OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE COMPANY
OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SERIES A PREFERENCE SHARES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRANSFER AGENT’S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (D) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.

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

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

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

 

 

Exhibit 4.2

 

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

	 	 	 	 	 
	 	 	Number of	 	 
	Certificate Number	 	Preference Shares	 	 
	o

	 	          o	 	 

CUSIP NO.: [     ]

Non-Cumulative Preference Shares, Series A

(par value 0.10¢ per share)

(liquidation preference U.S.$1000 per Preference Share)

of

RAM HOLDINGS LTD.

     RAM HOLDINGS LTD., a Bermuda exempted company (the ‘‘Company’’), hereby certifies that [      
] (the ‘‘Holder’’) is the registered owner of [     
]1 [       , or such number as is indicated in the records of the Registrar
and the Depository,]2 fully paid and non-assessable preference shares of the Company
designated the Non-Cumulative Preference Shares, Series A, with a par value of 0.10¢ per share and
a liquidation preference of U.S.$1000 per share (the ‘‘Preference Shares’’). The Preference Shares
are transferable on the books and records of the Registrar, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The
designations, rights, privileges, restrictions, preferences and other terms and provisions of the
Preference Shares represented hereby are issued and shall in all respects be subject to the
provisions of the Certificate of Designation dated December 7, 2006, as the same may be amended
from time to time (the ‘‘Certificate of Designation’’). Capitalized terms used herein but not
defined shall have the meaning given them in the Certificate of Designation. The Company will
provide a copy of the Certificate of Designation to a Holder without charge upon written request to
the Company at its principal place of business.

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

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

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

 

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

 

 

Exhibit 4.2

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

	 	 	 	 	 	 	 
	 	 	RAM HOLDINGS LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

 

 

Exhibit 4.2

REGISTRAR’S COUNTERSIGNATURE

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

Dated:

	 	 	 
	 

	 	BANK OF NEW YORK, as Registrar,
	 
	 	 
	 

	 	By:
	 

	 	Authorized Signatory

 

 

Exhibit 4.2

REVERSE OF SECURITY

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

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

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

 

ASSIGNMENT

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

 

 

      

 

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

 

 

(Insert address and zip code of assignee)

and irrevocably appoints:

 

      

 

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

Date:_                                        

Signature:

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

 

 

Exhibit 4.2

Signature Guarantee:                                        

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

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