REINSURANCE DEPOSIT AGREEMENT

REINSURANCE DEPOSIT AGREEMENT (CHARGE FORM - CITIBANK, N.A. AS CUSTODIAN)

EXECUTION COPY
(Option for non-matching Deposits) Form 12/CEP
Name of Chargor and address of its registered or principal office:
 
Greenlight Reinsurance, Ltd
65 Market Street
Suite 1207, Jasmine Court
Camana Bay, PO Box 31110 Grand Cayman, KY1-1205
CAYMAN ISLANDS
 
 
facsimile no:  345 745 4576                      Company Number:  CR-137831 (the
"Chargor")

Name of Custodian and address of its registered or principal office:
CITIBANK, N.A., FAO: INSURANCE LETTER OF CREDIT PRODUCT MANAGER, CITIGROUP
CENTRE, CANADA SQUARE, CANARY WHARF, LONDON E14 5LB
    (the "Custodian")

Date:  20TH August 2010

To:         CITIBANK EUROPE PLC (the "Bank")
Insurance Letter of Credit Department
2nd Floor
1 North Wall Quay
Dublin 1
Republic of Ireland

The terms used in this Deposit Agreement are defined in Clause 22

1.
PAYMENT AND DISCHARGE

The Chargor shall pay and discharge in full all of the Obligations at the times
and in the manner provided for in each Agreement.

2.
FIXED CHARGE AND ENFORCEMENT

 
(a)
The Chargor hereby charges with full title guarantee and by way of first fixed
charge, in the Bank’s favour all of the Chargor’s rights, title and interest in
the Assets as security for the payment to you and the discharge of all of the
Obligations.

 
(b)
If:

 
(i)
an Event of Default (as defined in the Committed Facility Letter) has occurred
and is
continuing;

 
(ii)
the Chargor defaults in paying or discharging any of the Obligations on demand
within 5
Business Days of its due date; or

 
(iii)
the Chargor defaults under or fails to comply with any provisions of this
Deposit Agreement, any other Agreement or any agreements or contract giving rise
to the Obligations and such default continues for a period of ten (10) Business
Days following the Bank’s notice of such non-compliance; or

 
              (iv)     the Custodian defaults under or fails to comply with any
material provision of the Custodian's Undertaking and such default continues for
a period of fifteen (15) days following the Bank’s notice of such non-compliance
to the Custodian and the Chargor;

 
then:

 
(A)
the security created by or pursuant to this Deposit Agreement shall become
immediately enforceable and the Bank may, subject to the requirements of
applicable law, without notice to the Chargor or prior authorisation from any
court, in the Bank’s absolute discretion enforce all or any part of that
security (at the times, in the manner and on the terms the Bank thinks fit) and
take possession of and hold or dispose of all or any part of the Assets; and

 
(B)
 without prejudice to the generality of (A) above, the Bank shall be entitled,
without notice or further demand but subject to the requirements of applicable
law, immediately to exercise all the rights, powers and remedies possessed by it
according to law as chargee of the Assets and to:

 
(I)
demand and receive all and any monies due under or arising out of each of the
Assets;

 
(II)
exercise in relation to each of the Assets all such rights as the Chargor was
then entitled to exercise in relation to each such Asset or might, but for the
terms of this Deposit Agreement, exercise; and

 
(III)
apply, set-off or transfer any or all of the Assets in or towards the payment or
other satisfaction of the Obligations or any part of them.

 
(C)
Subject to the requirements of applicable law, the Bank shall not be liable to
account as a mortgagee in possession in respect of all or any part of the Assets
or be liable for any loss upon realisation or for any neglect, default or
omission in connection with the Assets to which a mortgagee in possession might
otherwise be liable.

3.
REQUIRED DEPOSITS

 
(a)
It is agreed between the Chargor and the Bank in relation to each of the Credits
that:-

 
(i)
it is a prior condition to the establishment of any Credit pursuant to an
Agreement that there should first have been deposited with Citibank, N.A. (the
"Custodian") at their branch at Citigroup Centre, Canada Square, Canary Wharf,
London E14 5LB (or such other branch as may be advised to the Chargor by the
Bank for such purpose) in an account in the Chargor’s name designated as a
"Reinsurance Deposit Account" and/or such other designation(s) as may be agreed
between the Chargor and the Bank and notified by the Bank to the Custodian
(referred to herein as an "Account") a deposit:-

 
(1)
in an amount in the same currency as such Credit and at least equal to 100% of
the face value of such Credit (or such other percentage as may be agreed between
the Chargor and the Bank in writing for this purpose); and/or

 
(2)
in an amount in the currency(ies) and of the percentage all as required by the
alternative arrangements set out in Schedule Two hereto but subject to the
limitation(s) (if any) therein referred to (or as the same may from time to time
hereafter be amended or substituted),

 
and, in either case, the balance from time to time standing to the credit of any
such Account (the "Reinsurance Deposit") to be subject to the security hereby
constituted and to be applied on the terms and conditions herein set forth;

 
(ii)
so long as the Chargor is under any actual or contingent liability pursuant to
any Agreement, the Chargor shall be entitled, upon request, to require the Bank
to release from the security hereby constituted only that part of a Reinsurance
Deposit which is in excess of the amounts required by Clause 3(a)(i)(1) and (2);
provided, however, that the Chargor shall not be entitled to request any such
release if an Event of Default has occurred and is continuing.  Bank hereby
agrees that, promptly (and in any event within 2 Business Days) following
receipt of the Chargor’s request therefor, it shall notify the Custodian of its
consent to any such release;

 
(iii)
the Chargor shall be entitled to receive any interest which may accrue on each
Reinsurance Deposit, provided, however, that if an Event of Default has occurred
and is continuing, then such interest shall be paid only to the credit of the
relevant Account and such interest shall form part of the Reinsurance Deposit in
question;

 
(iv)
if at any time, acting reasonably,  the Bank determines that the amount of any
Reinsurance Deposit is less than the amount required by Clause 3(a)(i)(1) and/or
(2) the Chargor shall immediately (and in any event within three (3) Business
Days) following the Bank’s demand deposit in the relevant Account any further
sum or sums which the Bank may certify to be required to cover the shortfall;
and

 
(v)
until payment in full of the Obligations and termination of this agreement, the
Chargor shall not, without the Bank’s prior written consent, be entitled to
permit or agree to any variation of the rights attaching to the Assets or any
Account or to receive, withdraw or otherwise deal with or transfer the Assets or
any Account except as otherwise expressly provided herein.

 
(b)
In the event that the Bank elects not to allocate or otherwise attribute a
specific Reinsurance Deposit in an Account to a specific Credit, it may treat
all of the balance(s) from time to time standing to the credit of each Account
as constituting security in respect of the Obligations.

 
(c)
Following the occurrence and during the continuance of any of the events
described in Clauses 2  (b) (i) to 2 (b) (iv) above and subject to any
applicable grace and/or notice), the Bank is hereby irrevocably authorised
(without reference to the Chargor and on its behalf) to instruct the Custodian
to convert, so far as is then possible, all or part of a Reinsurance Deposit
established pursuant to the provisions of Clause 3(a)(i)(2) from its then
existing currency of denomination into the other currency(ies) which would have
been required if the provisions of Clause 3(a)(i)(1) had originally been
complied with by the Chargor (the "Requisite Currency(ies)").  The Requisite
Currency(ies) shall be held in one or more accounts established by the Custodian
for such purposes but otherwise subject to the security hereby constituted and
the terms and conditions hereof.   In order to effect the foregoing the Chargor
irrevocably authorises the Bank (without reference to the Chargor) to debit (on
the Chargor’s behalf) any account with such sums as may be required by the Bank
or the Custodian in or towards payment of the cost of obtaining the requisite
currency(ies) (whether or not such cost includes a premium over any official or
other rate of exchange) and all other costs, charges and expenses incurred by
the Bank or the Custodian (in connection with obtaining the requisite
currency(ies).

 
(d)
For the purpose of any calculations required by this Clause 3, the Bank may
convert any figure expressed in its existing currency of denomination into such
other currency of denomination as the Bank may require for the purposes hereof,
and any such conversion shall be effected at the Bank’s then prevailing spot
rate of exchange for obtaining such requisite currency(ies) with the existing
currency(ies).

4.
 
 
CUSTODIAN'S UNDERTAKING

 
(a)
the Chargor undertakes to deliver (or procure the delivery of) the Custodian's
Undertaking to the Bank forthwith upon the execution of this Security Agreement.

 
(b)
following the occurrence and continuance of an Event of Default, the Bank may at
any time and without prior notice to the Chargor exercise any or all of the
Bank’s rights under or pursuant to the Custodian's Undertaking.

5.
FURTHER ASSURANCE

The Chargor undertakes forthwith upon the Bank’s notice to that effect to
execute and sign all documents which the Bank may reasonably require for the
purposes hereof including any notices of charge in such form as the Bank may
reasonably require (which shall promptly be handed to the Bank) and do all such
acts and things as the Bank may determine to be necessary or expedient in
connection herewith.

6.
NOTICES OF CHARGE

Without prejudice to the generality of the power of attorney contained in Clause
9 the Chargor and the Bank hereby irrevocably authorises the Bank (without
reference to the Chargor) from time to time to deliver to the Custodian (on the
Chargor’s behalf) a notice of charge (substantially in the form set out in
Schedule One or in any other form as the Bank may require) in respect of each
Account and each account which may be created pursuant to the terms of Clause
3(c).

7.
REPRESENTATIONS AND WARRANTIES

(a)  
The Chargor hereby represents and warrants to the Bank and undertakes that:-

(i)  
It is and will, at all times during the subsistence of the security hereby
constituted, be the sole, lawful and beneficial owner of all of the Assets free
from mortgages or charges (other than this first fixed charge) or other
encumbrances;

(ii)  
(save as may have been disclosed by the Chargor to the Bank in writing prior to
the date of this Deposit Agreement) it has not sold or agreed to sell or
otherwise disposed of or agreed to dispose of, and (save with the Bank’s prior
consent) will not at any time during the subsistence of the security hereby
constituted sell or agree to sell or otherwise dispose of or agree to dispose
of, the benefit of all or any of its rights, titles and interests in and to the
Assets or any part thereof (except for any withdrawals and releases expressly
permitted by the terms hereof);

(iii)  
it has and will at all times have the necessary power to enable the Chargor to
enter into and perform the obligations expressed to be assumed by it under this
Deposit Agreement;

(iv)  
this Deposit Agreement constitutes its legal, valid, binding and enforceable
obligation and is a security over the Assets and every part thereof effective in
accordance with its terms, subject to (x) the effect of any applicable
bankruptcy, insolvency, reorganisation, moratorium or similar law affecting
creditors' rights generally and (y) the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or law); and

 
(v)
all necessary authorisations to enable or entitle it to enter into this Deposit
Agreement have been obtained and are in full force and effect and will remain in
such force and effect at all times during the subsistence of the security hereby
constituted.

 
(b)
The Chargor hereby represents and warrants to the Bank that:-

(i)  
it is not unable to pay its debts as they fall due;

(ii)  
it has not been deemed or declared to be unable to pay its debts under
applicable law;

(iii)  
it has not suspended making payments on any of its debts;

(iv)  
it has not by reason of actual or anticipated financial difficulties commenced
negotiations with any of its creditors with a view to rescheduling any of its
indebtedness;

(v)  
the value of its assets is not less than its liabilities (taking into account
contingent and prospective liabilities);

(vi)  
no moratorium has been declared in respect of any of its indebtedness; and

(vii)  
no analogous or similar event or concept to those set out in Clauses 7(b)(i) to
7(b)(vi) above has occurred or is the case under the laws of any jurisdiction.

8.
NEGATIVE PLEDGE

The Chargor hereby undertakes with the Bank that at no time during the
subsistence of the security hereby constituted will it, otherwise than:

(a)       in the Bank’s favour or in favour of Citibank, N.A. (if applicable);
or

 
(b)
with the Bank’s prior written consent and in accordance with and subject to any
conditions which the Bank may attach to such consent,

 
create, grant, extend or permit to subsist any mortgage or other fixed security
or any floating charge on or over the Assets or any part thereof.  The foregoing
prohibition shall apply not only to mortgages, other fixed securities and
floating charges which rank or purport to rank in point of security in priority
to the security hereby constituted but also to any mortgages, securities or
floating charges which rank or purport to rank pari passu therewith or
thereafter.

9.
POWER OF ATTORNEY

 
The Chargor hereby irrevocably appoints the Bank to be its attorney and in its
name and on its behalf and as its act and deed to sign, seal, execute, deliver,
perfect and do all documents and things as may be, or as the Bank may reasonably
consider to be requisite for carrying out any obligations imposed on the Chargor
under Clause 5. The Chargor hereby undertakes to ratify and confirm all things
done and documents executed by the Bank in the exercise of the power of attorney
conferred by this Clause.

10.
CONSOLIDATION OF SECURITIES

 
Subsection (1) of Section 93 of the Law of Property Act 1925 shall not apply to
this Deposit Agreement.

11.
EFFECTIVENESS OF SECURITY

(a)  
This Deposit Agreement shall be in addition to and shall be independent of every
other security which the bank may at any time hold for any of the
Obligations.  No prior security held by the bank over the whole or any part of
the Assets shall merge in the security hereby constituted.

(b)  
This Deposit Agreement shall remain in full force and effect as a continuing
security until the Obligations have been unconditionally and irrevocably paid
and performed in full and this Deposit Agreement and the other Facility
Documents shall have been terminated (other than for any contingent
indemnification with respect to then unasserted claims which, pursuant to the
express terms of this Deposit Agreement or the other Facility Documents, survive
the termination of this Deposit Agreement or the other Facility Documents), and
the Bank (at the reasonable request and sole expense of the Chargor), will take
all reasonable action in order to execute and deliver to the Chargor the proper
instruments acknowledging the termination of this Deposit Agreement and the
security over the Assets, and will duly assign, transfer and deliver to the
Chargor such of the Assets as may be in possession of the Bank and have not
thereto been disposed of, applied or released.

(c)  
Nothing in this Deposit Agreement is intended to, or shall operate so as to,
prejudice or affect any bill, note, guarantee, mortgage, pledge, charge or other
security of any kind whatsoever which the Bank may have for the Obligations or
any of them or any right, remedy or privilege of the Bank’s thereunder.

12.
REMEDIES, TIME OR INDULGENCE

 
(a)
The rights, powers and remedies provided by this Deposit Agreement are
cumulative and are not, nor are they to be construed as, exclusive of any right
of set-off or other rights, powers and remedies provided by law.

 
(b)
No failure on the Bank’s part to exercise, or delay on the Bank’s part in
exercising, any of the rights, powers and remedies provided by this Deposit
Agreement or by law (each a "Bank's Right") shall operate as a waiver thereof,
nor shall any single or partial waiver of any Bank's Right preclude any further
or other exercise of such Bank's Right or the exercise of any other Bank's
Right.

(c)  
The Bank may in its discretion grant time or other indulgence or make any other
arrangement, variation or release with any person(s) not party/ies hereto
(irrespective of whether such person(s) is/are jointly liable with the Chargor)
in respect of the Obligations or in any way affecting or concerning them or any
of them or in respect of any security for the Obligations or any of them,
without in any such case prejudicing, affecting or impairing the security hereby
constituted, or any Bank's Right or the exercise of the same, or any
indebtedness or other liability owed by the Chargor to the Bank.

13.
ACCOUNTS

 
(a)
If the Bank shall at any time receive notice of any subsequent mortgage,
assignment, charge or other interest affecting the whole or any part of the
Assets the Bank may open a new account or accounts for the Chargor in its
books.  If the Bank does not do so, then (unless the Bank gives express written
notice to the contrary to the Chargor) as from the time of receipt of such
notice by the Bank, all payments made by the Chargor to the Bank shall in the
absence of any express appropriation by the Bank to the contrary be treated as
having been credited to a new account of the Chargor’s and not as having been
applied in reduction of the Obligations at the time when the Bank received the
notice.

 
(b)
Following the occurrence and during the continuance of any of the Events
described in Clauses 2(b)(i) to 2(b)(iv) above (and subject to any applicable
grace and/or notice periods), all monies received, recovered or realised by the
Bank under this Deposit Agreement (including the proceeds of any conversion of
currency) may in the Bank’s discretion be credited to any suspense or impersonal
account and may be held in such account for so long as the Bank shall think fit
(with interest accruing thereon at such rate, if any, as the Bank may deem fit)
pending their application from time to time (as the Bank shall be entitled to do
in the Bank’s discretion) in or towards the discharge of any of the Obligations.

 
(c)
In case the Bank shall have more than one account for the Chargor in its books
the Bank may at any time after making any demand for payment or other discharge
of any of the Obligations or after the Bank shall have received notice of any
subsequent charge or other interest affecting all or any part of the Assets, and
without prior notice in that behalf, forthwith transfer all or any part of any
balance standing to the credit of any such account to any other such account
which may be in debit.

14.
CURRENCY

(a)  
For the purpose of or pending the discharge of any of the Obligations the Bank
may convert any monies received, recovered or realised or subject to application
by the Bank under this Deposit Agreement (including the proceeds of any previous
conversion under this Clause) from their existing currency of denomination into
such other currency of denomination as the Bank may think fit (acting
reasonably), and any such conversion shall be effected at the Bank’s then
prevailing spot rate of exchange for obtaining such other currency with the
existing currency.

 
(b)
References herein to any currency extend to any funds of that currency and for
the avoidance of doubt funds of one currency may be converted into different
funds of the same currency.

15.
COSTS, CHARGES AND EXPENSES

15.1           The Company undertakes to indemnify the Bank, within 5 Business
Days following demand, for and against all actions, proceedings, liabilities,
losses and damages in connection with this DepositAgreement (except to the
extent arising from the gross negligence or wilful misconduct of the Bank).

15.2           The Company undertakes within 5 Business Days to pay or reimburse
the Bank for all:

(i) reasonable invoiced out-of-pocket charges, costs and expenses which the Bank
actually incurs (including non-exclusively the cost of all required
registrations and any other legal fees that theBank actually incurs in relation
to this Deposit Agreement) in connection with the preparation and administration
of this Deposit Agreement; and

(ii) out-of-pocket, charges, costs and expenses which the Bank incurs in
connection with the enforcement of this Deposit Agreement.

16.
LAW AND JURISDICTION

 
This Deposit Agreement and all non-contractual obligations arising out of or in
connection with it shall be governed by English law and for the Bank’s benefit
the Chargor hereby irrevocably submits to the jurisdiction of the English courts
in respect of any disputes which may arise from or in connection with this
Deposit Agreement.

17.
PROVISIONS SEVERABLE

 
Each of the provisions contained in this Deposit Agreement shall be severable
and distinct from one another and if at any time any one or more of such
provisions is or becomes invalid, illegal or unenforceable, the validity,
legality and enforceability of each of the remaining provisions of this Deposit
Agreement shall not in any way be affected prejudiced or impaired thereby.

18.
NOTICES

 
(a)
Any notice or demand to be served on the Chargor by the Bank hereunder may be
served:-

 
        (i)          on any of the Chargor’s officers personally;

 
(ii)
by letter addressed to the Chargor or to any of the Chargor’s officers and left
at the Chargor’s registered office or at any one of the Chargor’s principal
places of business;

 
(iii)
by posting the same by letter addressed in any such manner as aforesaid to such
registered office or any such principal place of business; or

 
(iv)
by facsimile addressed in any such manner as aforesaid to any then published
facsimile number of the Chargor’s.

 
(b)
Any notice or demand to be served on the Bank by the Chargor hereunder must be
served on the Bank either at the Bank’s address stated at the beginning of this
Deposit Agreement (or such other address as the Bank may notify the Chargor of
from time to time) or by facsimile to such number as the Bank may notify the
Chargor of from time to time.

(c)           Any notice or demand:-

 
(i)
sent by post in accordance with Clause 18(a) to an address in the Republic of
Ireland or the United Kingdom shall be deemed to have been served on the Chargor
at 10.00 a.m. (London time) on the first Business Day after the date of posting
(in the case of an address in the Republic of Ireland) and on the Second
Business Day after posting (in the case of an address in the United Kingdom) or,
in the case of an address outside the Republic of Ireland or the United Kingdom
(or a notice or demand to you), shall be deemed to have been served on the
relevant party at 10.00 a.m. (London time) on the third Business Day after and
exclusive of the date of posting; or

 
(ii)
sent by facsimile in accordance with Clause 18(a) shall be deemed to have been
served on the relevant party when dispatched.

In proving such service by post it shall be sufficient to show that the letter
containing the notice or demand was properly addressed and posted and such proof
of service shall be effective notwithstanding that the letter was in fact not
delivered or was returned undelivered.

19.       THE BANK'S DISCRETIONS

 
Any liberty or power, subject to any express restriction contained herein which
may be exercised or any determination which may be made hereunder by the Bank
may be exercised or made in the Bank’s absolute and unfettered discretion and
the Bank shall not be under any obligation to give reasons therefor.

20.
ASSIGNMENT

The Bank shall have a full and unfettered right to assign the whole or any part
of the benefit of this Deposit Agreement to a Permitted Transferee and the
expression the "Bank" wherever used herein shall be deemed to include the Bank’s
assignees and other successors, whether immediate or derivative who shall be
entitled to enforce and proceed upon this Deposit Agreement in the same manner
as if named herein.  The Bank shall be entitled to impart any information
concerning the Chargor to any Permitted Transferee or other successor or any
participant or proposed assignee, successor or participant; provided, however,
that any such assignment or novation, CEP may disclose to the assignee or
transferee or proposed assignee or proposed transferee any information relating
to the Company furnished to CEP by or on behalf of the Company, provided that,
prior to any such disclosure, the assignee or transferee or proposed assignee or
proposed transferee shall agree to be subject to the same confidentiality
obligations  applicable to CEP with respect to any confidential information
related to the Company and shall enter into a confidentiality agreement to such
effect with CEP under which the Company is designated a third party beneficiary
with the right to enforce the terms of such confidentiality agreement.

(b) The term “Permitted Transferee” shall have the meaning given to it in the
Master Reimbursement Agreement.

21.
FIXED TIME DEPOSITS

 
The Chargor hereby agrees with the Bank that if, apart from the terms of this
Deposit Agreement, the whole or any part of the monies from time to time
deposited by the Chargor with the Custodian pursuant to the terms of the Deposit
Agreement are held in a fixed time deposit account (each such account being
referred to in this Clause as a "Fixed Time Deposit Account" and the monies
therein being referred to in this Clause as a "Fixed Time Deposit") then:-

 
(a)
insofar as the context may require, the references in this Deposit Agreement to
an Account, an account and a Reinsurance Deposit shall be construed mutatis
mutandis as though they were, respectively, references to a fixed time deposit
account and a fixed time deposit;

 
(b)
unless and until the Chargor is entitled to have the whole of a Fixed Time
Deposit released from the security hereby constituted the Chargor shall renew
each Fixed Time Deposit, upon each of its maturity dates, for such period of
time and on such terms as may be agreed between the Chargor and the Bank (or, in
the absence of agreement between the Chargor and the Bank, as may be determined
by the Bank in its sole discretion) (such terms which the Bank shall be entitled
to communicate to the Custodian) (each such period of time being referred to in
this Clause in respect of the Fixed Time Deposit to which it relates as a
"Deposit Period"); and

 
(c)
the existence of any Fixed Time Deposit shall not prejudice any of the Bank’s
rights under or pursuant to the Agreement(s) and/or this Deposit Agreement and,
without prejudice to the generality of the foregoing, the Bank shall not be
precluded or in any way obliged to delay the exercise of the Bank’s rights
pursuant to this Deposit Agreement until the maturity of any Deposit Period
relating to any Fixed Time Deposit and the Bank may (by instructing the
Custodian accordingly) unilaterally terminate such deposit period at any time
for any reason, quantify the cost to be incurred by the Chargor as a result
thereof and instruct the Custodian (who the Chargor irrevocably authorises the
Bank (without reference to the Chargor) to so instruct) to adjust any interest
payable by the Custodian accordingly.  If, pursuant to the terms of this Deposit
Agreement, the Chargor is entitled to withdraw any surplus funds from a Time
Deposit Account such right may only be exercised by the Chargor at the end of a
Deposit Period relating thereto.

22.
INTERPRETATION

(a)  
In this Deposit Agreement:

"Account" shall be construed in accordance with Clause 3(a)(i) or otherwise as
may be from time to time agreed in writing between the Bank and the Chargor
(and, for the avoidance of doubt, includes both those already existing or at any
time hereafter established) in accordance with the terms of this Deposit
Agreement;

"Acknowledgement of Notice" means an acknowledgement duly executed by the
Custodian in the form of acknowledgement of notice of charge of the assets
contained in Schedule One or in any other form as may be agreed by the Bank.

"Agreement" means, as to the context requires, the relevant Facility Document
and each agreement (as amended, varied, assigned or novated or supplemented and
whether made on or before the date hereof, or at any time hereafter) between the
Chargor (or by any person for and on behalf of the Chargor) and the Bank
pursuant to which the Bank has established, maintained, amended or renewed or
arranged for the establishment, maintenance, amendment or renewal of a Credit;

"Assets" means all monies now or at any time hereafter during the subsistence of
the security constituted by this Deposit Agreement standing to the credit of (a)
each Account and (b) any account opened by the Custodian pursuant to Clause 3(c)
and, in each case, all the entitlements to interest and other rights and
benefits accruing to or arising in connection with such monies;

"Bank" means Citibank Europe plc and includes any permitted assignee, novatee or
successor to the rights and, as the case may be, obligations of Citibank Europe
plc under and pursuant to the terms of the Agreement;

“Committed Facility Letter” shall have the meaning given to it in the Master
Agreement;

"Credit" means a letter of credit or similar or equivalent instrument from time
to time established, maintained, amended or renewed pursuant to an Agreement and
shall include any portion of any single letter of credit or similar or
equivalent instrument which is attributable by the Bank to the Chargor and which
was established, maintained, amended or renewed pursuant to an Agreement and/or
any agreement between the Bank and another person incorporating similar
instructions;

"Custodian" means the above mentioned custodian or any such other person as the
Chargor and the Bank may agree to in writing from time to time;

"Custodian's Undertaking" means an undertaking in the form set out in Schedule
Three duly executed by the Custodian as the same may be amended or substituted
with the prior written consent of the Bank from time to time;

“Facility Document” means the following documents: Master Reimbursement
Agreement Form 3/CEP (“Master Agreement”), dated on or about the date of this
agreement, this Agreement (Form 12/CEP), Corporate Mandate entered into on
August  9th 2010, the General Communication Indemnity entered into on or about
the date of this agreement  and the Committed Facility Letter (as defined in the
Master Agreement), and any other documents which the Bank reasonably determines
to be necessary or expedient in connection herewith or the issuance,
establishment, maintenance etc of any credit and any other document pursuant to
which a security interest, guarantee or other form of credit support is created
or exists in favour of the Bank in respect of the obligations of the Company
under this Agreement.

"Obligations" means any and all of the present or future, actual or contingent
obligations of the Chargor to the Bank hereunder, under any Agreement (whether
incurred alone or jointly and whether as principal or severally or in some other
capacity); and

"Reinsurance Deposit" shall be construed in accordance with Clause 3(a)(i), or
otherwise as may be from time to time be agreed in writing between the Bank and
the Chargor.

(b)         Any reference in this Deposit Agreement to:-

a "Business Day" shall be construed as a reference to a day (other than a
Saturday or Sunday) on which banks are generally open for business in London;

a "Clause" is, unless otherwise stated, a reference to a Clause hereof;

a "person" shall be construed as a reference to any person, firm, company,
corporation, government, state or agency of a state or any association or
partnership (whether or not having separate legal personality) of two or more of
the foregoing; and

a "Schedule" is, unless otherwise stated, a reference to a schedule hereto.

(c)         Clause and Schedule headings are for ease of reference only.

23.
THIRD PARTY RIGHTS

 
(a)
Subject to this Clause and to Clause 24 a person who is not a party to this
Deposit Agreement has no rights under the Contracts (Rights of Third Parties)
Act 1999 (the "Third Parties Act") to enforce any term of this Deposit
Agreement.

 
(b)
The Custodian may enforce the terms of Clause 24 subject to and in accordance
with this Clause and Clause 16 and the provisions of the Third Parties Act.

 
(c)
The parties to this Deposit Agreement do not require the consent of the
Custodian to rescind or vary this Deposit Agreement at any time.

 
(d)
If the Custodian brings proceedings to enforce the terms of Clause 24 the
Chargor shall only have available to it by way of defence, set-off or
counterclaim a matter that would have been available by way of defence, set-off
or counterclaim if the Custodian had been a party to this Deposit Agreement.

 
(e)
The Custodian may not take proceedings to enforce a term of this Deposit
Agreement unless and until it gives notice in writing to the Chargor, in any
manner as is permitted by Clause 18, agreeing irrevocably to the provisions of
Clause 16.

 
24.
BANK'S INSTRUCTIONS TO THE CUSTODIAN

 
The Chargor hereby agrees that the Custodian shall be entitled to rely on and
action any instructions which it receives from the Bank which the Bank is
entitled to give to it pursuant to the terms of this Deposit Agreement.

IN WITNESS whereof this Deposit Agreement has been signed by the Bank, and the
Chargor has executed and unconditionally delivered this Deposit Agreement as a
DEED on the date first above stated.

 
 

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SCHEDULE ONE
NOTICE OF CHARGE OF THE ASSETS1

To:
Citibank, N.A.

 
Citigroup Centre

 
Canada Square

 
Canary Wharf

 
London  E14 5LB

We refer to the Reinsurance Deposit Agreement (Charge Form - Citibank, N.A. as
Custodian) (Form 12/CIFS) (the "Deposit Agreement") dated 20th August 2010
entered into by Greenlight Reinsurance, Ltd (the "Chargor") in favour of
Citibank Europe plc (the "Bank"), a copy of which is annexed hereto. Terms
defined in the Deposit Agreement shall have the same meanings herein.

Pursuant to Clause 6 of the Deposit Agreement we give this notice to you on
behalf of the Chargor.  [This notice is in addition to, and does not replace,
any previous notices given to you in connection with the Deposit Agreement.]2

Notice is hereby given by us to you that, by and pursuant to the Deposit
Agreement the Chargor has  charged in favour of the Bank all of its right, title
and interest in the Assets.

This notice is given in respect of the Accounts and the accounts opened pursuant
to Clause 3(c) of the Deposit Agreement in existence as at the date of this
Notice.

Please note that, pursuant to the terms of the Deposit Agreement, the Chargor is
not entitled to permit or agree to any variation of the rights attaching to the
Assets or any Account or to receive, withdraw or otherwise deal with or transfer
the Assets or any Account except to the extent otherwise expressly provided in
the Deposit Agreement.

Please accept this notice by signing the enclosed acknowledgement and returning
it to the Bank at Citibank Europe plc, Insurance Letter of Credit Department,
2nd Floor, 1 North Wall Quay, Dublin 1, Republic of Ireland.

Yours faithfully,

                        

               Niall Tuckey                    
for and on behalf of
Citibank Europe plc

                /s/ Niall Tuckey              
Signature(s)

Dated:   20 August 2010

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1 This notice is to be given to the Custodian following the establishment of
each Account and of each account opened pursuant to clause 3(c) of the Deposit
Agreement.

 
 
 
2 To be included where a previous notice has been given.

 

 
 

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ACKNOWLEDGEMENT OF NOTICE OF CHARGE OF THE ASSETS3

To:          Citibank Europe plc
Insurance Letter of Credit Department
2nd Floor
1 North Wall Quay
Dublin 1
Republic of Ireland

At your request we acknowledge receipt of the Notice of Charge August 20th 2010
on the terms attached and in respect of the Assets (as defined in such notice).

We acknowledge that the Chargor is not entitled to permit or agree to any
variation of the rights attaching to the Assets or any Account or to receive,
withdraw or otherwise deal with or transfer the Assets or any Account except to
the extent otherwise expressly provided in the Deposit Agreement.

We shall not permit any amount to be withdrawn from any of the Accounts or any
of the accounts opened pursuant to clause 3(c) of the Deposit Agreement without
your prior written consent.

Yours faithfully,

Peadar MacCanna, Director
for and on behalf of
Citibank, N.A.

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3 To be executed and returned in respect of each Notice of Charge.

 

 
 

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SCHEDULE TWO

For the purposes of Clause 3(a)(i):

1.
A Reinsurance Deposit may, at the election of the Chargor, be in any currency
which is acceptable to the Bank and which is freely transferable and convertible
into U.S. dollars.  Where, after a Reinsurance Deposit has been established, the
currency of all or a portion thereof ceases to be acceptable to the Bank, the
Bank may require that such Reinsurance Deposit or such portion thereof be
converted into or re-established in another currency acceptable to the Bank and
may instruct the Custodian to so convert or re-establish such deposit.  The Bank
is irrevocably authorised (without reference to us) to so instruct the
Custodian.

2.
Where a Reinsurance Deposit or a portion thereof is denominated in the same
currency as a Credit (the "Credit Currency"), the Reinsurance Deposit or such
portion thereof shall have a value of 100% of its value in the relative Credit
Currency; and for this purpose the Bank (and the Custodian) shall notionally
match each Credit with a Reinsurance Deposit or a portion thereof denominated in
the relative Credit Currency.

3.  
Where a Reinsurance Deposit or a portion thereof is denominated in a currency
other than the relative Credit Currency, both the proportion specified above of
the face value of the Credit (the "Required Value") (or, where only a portion of
the Reinsurance Deposit is in the relative Credit Currency, the balance of the
Required Value remaining unmatched) and the Reinsurance Deposit or such portion
thereof shall be notionally converted into a common base currency (as the Bank
may in its reasonable discretion determine); and following such notional
conversion the Reinsurance Deposit or such portion thereof shall suffer a
deduction of the Relevant Percentage, to cover exchange movements that may from
time to time affect the value of the underlying unmatched Reinsurance Deposit or
a portion thereof and the contingent obligations to which it relates.

4.  
The "Relevant Percentage" means:

 
(a)
where a Reinsurance Deposit or a portion thereof is denominated in U.S. dollars,
Canadian dollars or Sterling, 10%;

 
(b)
where a Reinsurance Deposit or a portion thereof is denominated in Euro, Swiss
francs or Japanese yen, 15%; and

 
(c)
where a Reinsurance Deposit or a portion thereof is denominated in any other
currency, 25%.

5.
For the purposes of each notional conversion to be effected hereunder the
provisions of Clause 14(a) shall apply mutatis mutandis.

 
 

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SCHEDULE THREE
Custodian’s Undertaking

Name of Custodian and address of its registered or principal office:
 
CITIBANK, N.A., FAO: INSURANCE LETTER OF CREDIT PRODUCT MANAGER, CITIGROUP
CENTRE, CANADA SQUARE, CANARY WHARF, LONDON E14 5LB
 
 
                                            (the "Custodian")

Name of Chargor and address of its registered or principal office:
 
Greenlight Reinsurance, Ltd
65 Market Street
Suite 1207, Jasmine Court
Camana Bay, PO Box 31110 Grand Cayman, KY1-1205
CAYMAN ISLANDS
 
 
facsimile no: 345 943 4573                      Company Number:   CR -
137831             (the "Chargor")

Date of Reinsurance Deposit Agreement (Charge Form - Citibank, N.A. as
Custodian)
(Form 12/CIFS):                                          20th August 2010

 
To:
CITIBANK EUROPE PLC (the "Bank")

Insurance Letter of Credit Department
 
2nd Floor

 
1 North Wall Quay

 
Dublin 1

 
Republic of Ireland

We, the Custodian, refer to the above-mentioned Deposit Agreement (the "Deposit
Agreement") between the Chargor and the Bank. Save where the context otherwise
requires, terms defined in the Deposit Agreement shall have the same meanings
herein.

In consideration of the Bank establishing, maintaining, amending, renewing or
substituting or arranging the establishment, maintenance, amendment, renewal or
substitution of a Credit pursuant to any Agreement or otherwise granting
financial accommodation to the Chargor, and pursuant to instructions received by
the Custodian from the Chargor, the Custodian hereby represents and irrevocably
undertakes and agrees to and with the Bank as follows:

 
1.
The Custodian will hold the Assets to the Bank's Order and for such purposes
will act as pledgeholder for and on behalf of the Bank in accordance with the
terms of the Deposit Agreement and will comply with all undertakings it gives in
each Acknowledgement of Notice.

 
2.
We have not received notice of any previous assignments of, charges over or
trusts in respect of, the Assets or the Account(s) and we will not, without the
Bank's prior written consent (a) exercise any right of combination,
consolidation or set-off which we may have in respect of the Assets or the
Account(s) or (b) amend or vary any rights attaching to the Assets or the
Account(s).

3.
The Custodian will ensure that the Bank has, at all times, such access
(electronic or otherwise) to the collateral platform computer systems and
records currently named "Flexecube" and "Cosmos" which are maintained by the
Custodian (and any successor or replacement computer systems and/or records)
(collectively the "Computer Systems") as the Bank may require from time to time.

 
4.
The Custodian will ensure that:

 
(a)
the Computer Systems display, at all times, all the information that the Bank
may require from time to time; and

              (b)
that such information is correct, complete and up-to-date at all times.

 
5.
The Custodian will, without prejudice to the remainder of this Undertaking,
comply with any instructions received from persons authorised by the Bank
pursuant to the Bank's rights under:

 
(a)
Clause 3(c) of the Deposit Agreement (and will establish such accounts as may be
necessary pursuant to such Clause);

              (b)
Clause 21 of the Deposit Agreement; and

             (c)
the Second Schedule to the Deposit Agreement.

 
6.
All rights and interests of the Custodian in or towards the Assets or any
Account or any part thereof are and shall be subordinated and postponed to the
Bank’s rights and interests therein under and pursuant to the Deposit Agreement,
save that the Custodian shall be entitled to debit any account of the Chargor
with the Custodian with any reasonable fees or commissions due and owing by the
Chargor to the Custodian in respect of the Assets or part thereof.

 
 7.

 
(a)
Any notice, demand or other communication to be served on us by you (or vice
versa) hereunder must be served on the relevant party:

 
(i)
at such party's address stated at the beginning of this Undertaking (or such
other address as either party may notify the other of from time to time); or;

 
(ii)
by facsimile to such number as either party may notify the other of from time to
time;

              (b)
Any notice, demand or other communication:-

 
(i)
sent by post to either party, shall be deemed to have been served on the
relevant party at 10.00 a.m. (London time) on the third Business Day after and
exclusive of the date of posting; or

 
(ii)
sent by facsimile shall be deemed to have been served on the relevant party when
dispatched. In proving such service by post it shall be sufficient to show that
the letter containing the notice, demand or other communications was properly
addressed and posted and such proof of service shall be effective
notwithstanding that the letter was in fact not delivered or was returned
undelivered.

 
8.
This Undertaking shall be governed by and construed in accordance with, English
law and, for the benefit of the Bank, the Custodian hereby irrevocably submits
to the jurisdiction of the English courts in respect of any dispute which may
arise from or in connection with this Undertaking.

 
9.
A person who is not a party to this Undertaking has no right under the Contracts
(Rights of Third Parties) Act 1999 to enforce any term of this Undertaking.

 

 
Peadar MacCanna, Director

 
(Authorised Signatory)

 
for and on behalf of the Custodian

 

 
20th August, 2010

 
 

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*
The COMMON or CORPORATE SEAL of
   
the CHARGOR was hereto affixed
   
to this DEED in the presence of:
    /s/Tim Courtis________________________    
 
Tim Courtis                      
    Chief Financial Officer                
**EXECUTED as a DEED
   
by the CHARGOR
         
/s/ Tim Courtis
    Tim Courtis        Chief Financial Officer           /s/ Faramarz Romer     
Faramarz Romer     Reporting & Compliance Officer          
Accepted and agreed for and on behalf of
)
 
CITIBANK EUROPE PLC
)
  /s/ Niall Tuckey     
By: Niall Tuckey
   

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* For a company whose internal constitution requires it to execute documents by
seal.  The seal must be applied in accordance with the company's internal
constitution
 
** For a company whose internal constitution does not require it to execute
documents by seal (there is no longer a legal requirement for a company
incorporated in England and Wales to execute deeds by seal unless its internal
constitution (as decided voluntarily by the company in question) requires it to
do so).
 
*** For a company, firm or corporation which is not incorporated in England and
Wales, please execute this Form 12/CEP in accordance with local practice for
documents of a similar nature.

 
 

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