Document:

Exhibit 10.2
	 

	 
		EXECUTION COPY
	 

	 
		FORM OF SECURITIES PURCHASE
		AGREEMENT
	 

	 
		This SECURITIES PURCHASE AGREEMENT, dated as
		of
		                    (this
		“Agreement”), is made by and between Greenlight Capital Re,
		Ltd., a corporation organized under the laws of the Cayman Islands (the
		“Company”), and each individual identified on Exhibit A
		hereto (each, a “Purchaser”
		and, collectively, the “Purchasers”).
	 

	 
		WITNESSETH:
	 

	 
		WHEREAS, the Company desires to issue to
		each Purchaser, and each Purchaser agrees to accept Class A Ordinary Shares,
		par value US$0.10 per share (the “Class A Ordinary Shares”) of the Company, on the terms and conditions
		specified herein; and
	 

	 
		NOW, THEREFORE, in consideration of the
		promises, mutual covenants and agreements hereinafter contained and the
		transactions contemplated by the Offering, the parties hereto hereby agree as
		follows:
	 

	 
			
				
				   
				

			 	
				
				  1.
				

			 	
				
				  Sale and Purchase of
				  Shares.
				

			 

 

	 
			
				
				   
				

			 	
				
				  1.1
				

			 	
				
				  Sale and Purchase of the Class A
				  Ordinary Shares.
				

			 

 

	 
		Subject to the terms and conditions of this
		Agreement, on the Closing Date (as defined below), the Company shall sell and
		issue to each Purchaser, and each Purchaser shall purchase and accept from the
		Company, that number of Class A Ordinary Shares set forth opposite his or her
		name on Exhibit A hereto at
		         per share (collectively,
		the “Shares”). Upon the consummation of the transactions
		contemplated hereby, the Company shall register the appropriate number of Class
		A Ordinary Shares in the name of each Purchaser.
	 

	 
			
				
				   
				

			 	
				
				  2.
				

			 	
				
				  Purchase Price.
				

			 

 

	 
			
				
				   
				

			 	
				
				  2.1
				

			 	
				
				  Payment of the Purchase
				  Price.
				

			 

 

	 
		On or prior to the Closing (as defined
		below) each Purchaser shall pay to the Company that amount as set forth
		opposite his or her name in Exhibit
		A hereto (the “Purchase Price”) in United States dollars by wire transfer of
		immediately available funds, or by such other method as may be reasonably
		acceptable to the Company and each Purchaser, to the account designated in
		Exhibit B hereto.
	 

	 
			
				
				   
				

			 	
				
				  3.
				

			 	
				
				  Closing.
				

			 

 

	 
			
				
				   
				

			 	
				
				  3.1
				

			 	
				
				  Closing Date.
				

			 

 

	 
		 
	 

	 
		1
	 

	 
		 
	 

	 
 

	 
		The closing of the sale and purchase of the
		securities provided for in Sections 1.1 (the “Closing”)
		shall take place simultaneously with the execution of this Agreement and upon
		the satisfaction or waiver of all of the conditions set forth in Section 7
		hereof and shall occur at 10:00 a.m. at the offices of Akin Gump Strauss Hauer
		& Feld LLP, 590 Madison Avenue, New York, New York (or at such other place
		as the parties hereto may mutually agree) on March 30, 2006, or on such other
		date as the parties hereto may mutually agree. The date on which the Closing is
		held is referred to in this Agreement as the “Closing Date.”
	 

	 
			
				
				   
				

			 	
				
				  4.
				

			 	
				
				  Representations and Warranties of
				  the Company.
				

			 

 

	 
		The Company hereby represents and warrants
		to each Purchaser that:
	 

	 
			
				
				   
				

			 	
				
				  4.1
				

			 	
				
				  Corporate Existence and Power;
				  Capitalization.
				

			 

 

	 
		(a) The Company is duly organized, validly
		existing and in good standing under the laws of the Cayman Islands (meaning
		that it has not failed to make any filing with any Cayman Islands governmental
		authority or pay any Cayman Islands government fee or tax which would make it
		liable to be struck off the Cayman Islands Register of Companies and therefore
		cease to exist), and has all corporate powers required to carry on its business
		as now being, and as proposed to be, conducted. The Company is authorized or
		duly qualified to do business as a foreign corporation and in good standing in
		each jurisdiction where the character of the property owned or leased by it or
		the nature of its activities make such qualification necessary.
	 

	 
		(b) The authorized share capital of the
		Company as of the date hereof will be as set forth on Schedule 4.1 attached
		hereto. Upon the consummation of this Agreement and assuming the issuances
		contemplated hereby of an aggregate of 91,800 Class A Ordinary Shares, the pro
		forma issued and outstanding shares of the Company and options to purchase
		Ordinary Shares will be as set forth on Schedule 4.1 attached hereto. Except as
		set forth in Schedule 4.1, there are no outstanding options, options, rights to
		subscribe to, or securities or rights convertible or exercisable into or
		exchangeable for any shares of capital stock of the Company, or arrangements by
		which the Company is or may become bound to issue additional shares of its
		capital stock.
	 

	 
			
				
				   
				

			 	
				
				  4.2
				

			 	
				
				  Corporate
				  Authorization.
				

			 

 

	 
		The execution, delivery and performance by
		the Company of its obligations under this Agreement and the shareholders’
		agreement dated August 11, 2004 among the Company and the shareholders of the
		Company (the “Shareholders’
		Agreement”) and the consummation
		by the Company of the transactions contemplated hereby and thereby, are within
		the Company’s corporate power and have been duly authorized by all
		necessary corporate action on the part of the Company. Each of this Agreement
		and the Shareholders’ Agreement has been duly and validly executed by the
		Company and constitutes the valid and binding agreement of the Company,
		enforceable against the Company in accordance with its terms, subject to
		applicable bankruptcy, insolvency, amalgamation, reorganization, moratorium and
		similar laws affecting creditors’ rights and remedies generally and
		subject, as to enforceability, to general 
	 

	 
		 
	 

	 
		2
	 

	 
		 
	 

	 
 

	 
		principles of equity (regardless of whether
		enforcement is sought in a proceeding of law or in equity).
	 

	 
			
				
				   
				

			 	
				
				  4.3
				

			 	
				
				  Governmental and Court
				  Authorization.
				

			 

 

	 
		The execution, delivery and performance by
		the Company of this Agreement and the Shareholders’ Agreement do not
		require consent, approval or authorization of, or filing, registration or
		qualification with, any governmental body, agency, official, court or other
		authority that has not been obtained or made.
	 

	 
			
				
				   
				

			 	
				
				  4.4
				

			 	
				
				  Non-Contravention.
				

			 

 

	 
		The execution, delivery and performance by
		the Company of its obligations under this Agreement and the Shareholders’
		Agreement do not and will not (A) contravene or conflict with the
		Company’s organizational documents or (B) (i) contravene or conflict with
		or constitute a violation of any provision of any law, regulation, judgment,
		injunction, order or decree binding upon or applicable to the Company, (ii)
		require any consent, approval or other action by any person or constitute a
		default under or give rise to any right of termination, cancellation or
		acceleration of any right or obligation of the Company to a loss of any benefit
		to which the Company is entitled under any provision of any agreement,
		contract, indenture, lease or other instrument binding upon the Company or any
		license, franchise, permit or other similar authorization held by the Company
		or (iii) result in the creation or imposition of any encumbrances.
	 

	 
			
				
				   
				

			 	
				
				  4.5
				

			 	
				
				  Authorization of the
				  Shares.
				

			 

 

	 
		When issued, sold, and delivered in
		accordance with this Agreement, the Shares will be validly issued and
		outstanding with no personal liability attaching to the ownership thereof and
		not subject to preemptive or similar rights of the shareholders of the Company
		or others, except as provided in the Shareholders’ Agreement and the
		Memorandum and Articles of Association of the Company.
	 

	 
			
				
				   
				

			 	
				
				  4.6
				

			 	
				
				  Litigation.
				

			 

 

	 
		There is no action, suit, investigation or
		proceeding pending against, or to the best knowledge of the Company threatened
		against or affecting, the Company or any of its properties before any court or
		arbitrator or any governmental body, agency, official or authority that (i)
		could reasonably be expected to have a material adverse effect or (ii) in any
		manner would enjoin, alter, call into question, affect or delay the
		transactions contemplated by this Agreement or the Shareholders’
		Agreement.
	 

	 
			
				
				   
				

			 	
				
				  5.
				

			 	
				
				  Representations and Warranties of
				  the Purchaser.
				

			 

 

	 
		Each Purchaser hereby represents and
		warrants to the Company, severally and not jointly, that:
	 

	 
			
				
				   
				

			 	
				
				  5.1
				

			 	
				
				  Governmental and Court
				  Authorization.
				

			 

 

	 
		 
	 

	 
		3
	 

	 
		 
	 

	 
 

	 
		The execution, delivery and performance by
		such Purchaser of this Agreement does not require the consent, approval or
		authorization of, or filing, registration or qualification with, any
		governmental body, agency, official, court or authority that has not been
		obtained or made.
	 

	 
			
				
				   
				

			 	
				
				  5.2
				

			 	
				
				  Non-Contravention.
				

			 

 

	 
		The execution, delivery and performance by
		such Purchaser of this Agreement does not and will not contravene or conflict
		with or constitute a violation of any provision of any law, regulation,
		judgment, injunction, order or decree binding upon or applicable to the
		Purchaser or his or her properties.
	 

	 
			
				
				   
				

			 	
				
				  5.3
				

			 	
				
				  Purchase for Investment;
				  Legend.
				

			 

 

	 
		(a) The Class A Ordinary Shares are being
		acquired for such Purchaser’s own account, and not with a view to making a
		public distribution thereof in violation of the United States Securities Act of
		1933, as amended (the “Securities
		Act”).
	 

	 
		(b) Other than as set forth on Schedule 5.3
		(b) hereto, such Purchaser is an “accredited investor” as defined in
		Rule 501 under the Securities Act.
	 

	 
		(c) Upon original issuance thereof, and
		until such time as the same is no longer required under the applicable
		requirements of the Securities Act, the Shares shall bear a legend
		substantially in the following form:
	 

	 
		“THE SECURITIES EVIDENCED BY THIS
		CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
		1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
		UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING
		SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
		SECURITIES ACT OF 1933, AS AMENDED, OR THE COMPANY AT ITS OPTION RECEIVES AN
		OPINION OF COUNSEL OF THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO
		THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
		EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT
		AND UNLESS, WHERE APPLICABLE, HAS RECEIVED THE PRIOR APPROVAL OF THE CAYMAN
		ISLANDS MONETARY AUTHORITY.
	 

	 
		IN ADDITION, THE SECURITIES EVIDENCED BY
		THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER RESTRICTIONS IN THE
		COMPANY’S ARTICLES OF ASSOCIATION AND PURSUANT TO A SHAREHOLDERS’
		
	 

	 
		 
	 

	 
		4
	 

	 
		 
	 

	 
 

	 
		AGREEMENT DATED AS OF AUGUST 11, 2004 AMONG
		THE COMPANY AND CERTAIN OF THE COMPANY’S SHAREHOLDERS. A COPY OF SUCH
		ARTICLES OF ASSOCIATION AND SHAREHOLDERS’ AGREEMENT WILL BE FURNISHED
		WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN
		REQUEST.”
	 

	 
			
				
				   
				

			 	
				
				  5.6
				

			 	
				
				  Access to Information.

				

			 

 

	 
		Such Purchaser has been afforded an
		opportunity to investigate the properties, businesses and operations of the
		Company and examine the books, records and financial condition of the Company
		and to make extracts and copies of any such books and records. No investigation
		by such Purchaser prior to or after the date of this Agreement shall diminish
		or obviate any of the representations, warranties, covenants or agreements of
		the Company contained in this Agreement or the documents related
		thereto.
	 

	 
			
				
				   
				

			 	
				
				  6.
				

			 	
				
				  Further Agreements of the
				  Parties.
				

			 

 

	 
			
				
				   
				

			 	
				
				  6.1
				

			 	
				
				  Other Actions.
				

			 

 

	 
		The Company and each of the Purchasers,
		severally and not jointly, agree to execute and deliver such other documents
		and take such other actions, as a party hereto may reasonably request for the
		purpose of carrying out the intent of this Agreement and the documents relating
		thereto. The provisions of this Section 6.1 shall survive the consummation of
		the transactions contemplated hereby.
	 

	 
			
				
				   
				

			 	
				
				  6.2
				

			 	
				
				  Acknowledgement of Voting
				  Restrictions.
				

			 

 

	 
		Each Purchaser acknowledges and agrees to be
		bound by the voting rights and restrictions with respect to the Class A
		Ordinary Shares as described in the Memorandum and Articles of Association of
		the Company.
	 

	 
			
				
				   
				

			 	
				
				  7.
				

			 	
				
				  Conditions to and Documents to be
				  Delivered at the Closing.
				

			 

 

	 
		The obligation of the parties to consummate
		the transactions contemplated by this Agreement is subject to the satisfaction
		on or prior to the Closing Date of each of the conditions set forth below. Any
		such condition may be waived by the other parties hereto by proceeding with the
		Closing.
	 

	 
			
				
				   
				

			 	
				
				  7.1
				

			 	
				
				  Documents to be Delivered by the
				  Company.
				

			 

 

	 
		At the Closing, the Company shall deliver to
		each Purchaser the following:
	 

	 
		(a) A certificate of good standing or
		compliance of the Company issued by the appropriate official from the
		jurisdiction of its formation issued not more than fifteen (15) calendar days
		prior to the Closing Date;
	 

	 
		 
	 

	 
		5
	 

	 
		 
	 

	 
 

	 
		(b) A copy of the Memorandum and Articles of
		Association of the Company certified by the secretary or assistant secretary of
		the Company, as being true and complete as of the Closing Date;
	 

	 
		(c) (i) A copy of resolutions of the board
		of directors of the Company, authorizing the execution, delivery and
		performance of this Agreement and the documents related thereto and the
		issuance of the Shares and (ii) a certificate of the secretary or assistant
		secretary of the Company, dated as of the Closing Date certifying that such
		resolutions were duly adopted and are in full force and effect; and
	 

	 
		(d) Such other documents as each Purchaser
		shall reasonably request.
	 

	 
			
				
				   
				

			 	
				
				  7.2
				

			 	
				
				  Documents to be Delivered by each
				  Purchaser.
				

			 

 

	 
		At the Closing, each Purchaser shall deliver
		to the Company his or her respective Purchase Price.
	 

	 
			
				
				   
				

			 	
				
				  7.3
				

			 	
				
				  Documents to be Delivered by both
				  the Company and each of the Purchasers.
				

			 

 

	 
		At the Closing, each of the Company and each
		Purchaser shall execute and deliver a Joinder Agreement to the
		Shareholders’ Agreement, a copy of which is attached hereto as
		Exhibit C.
	 

	 
			
				
				   
				

			 	
				
				  8.
				

			 	
				
				  Miscellaneous
				

			 

 

	 
			
				
				   
				

			 	
				
				  8.1
				

			 	
				
				  Specific Performance.
				

			 

 

	 
		Each of the parties hereto acknowledge and
		agree that the breach of this Agreement would cause irreparable damage to the
		other parties hereto and that the other parties hereto will not have an
		adequate remedy at law. Therefore, the obligations of each of the parties
		hereto under this Agreement shall be enforceable by a decree of specific
		performance issued by any court of competent jurisdiction, and appropriate
		injunctive relief may be applied for and granted in connection therewith. Such
		remedies shall, however, be cumulative and not exclusive and shall be in
		addition to any other remedies which any party may have under this Agreement or
		otherwise.
	 

	 
			
				
				   
				

			 	
				
				  8.2
				

			 	
				
				  Notices.
				

			 

 

	 
		All notices and other communications
		provided for herein shall be in writing and shall be deemed to have been duly
		given if delivered personally or sent by registered or certified mail, return
		receipt requested, postage prepaid:
	 

	 	 	
			 
				 
			 

		  	
			 
				 
			 

		  
	 	
			 
				To the Company:
			 

		  	
			 
				 
			 

		  
	 	
			 
				 
			 

		  	
			 
				Greenlight Capital Re, Ltd.
			 

			 
				The Grand Pavilion
			 

			 
				7 Mile Beach
			 

		  
	 	
			 
				 
			 

		  	
			 
				 
			 

		  

	 
		 
	 

	 
		6
	 

	 
		 
	 

	 
 

	 	 	
			 
				 
			 

		  	
			 
				 
			 

		  
	 	
			 
				 
			 

		  	
			 
				P.O. Box 1109, GT, Grand Cayman

			 

			 
				Attn: Leonard Goldberg
			 

			 
				Facsimile Number: (345)
				745-4576
			 

		  

	 	
			 
				with a copy to:
				     
			 

		  	
			 
				Akin Gump Strauss Hauer & Feld
				LLP
			 

		  

	 	 	 	
			 
				590 Madison Avenue
			 

			 
				New York, New York 10022
			 

			 
				Attn: Kerry E. Berchem, Esq.
			 

			 
				Facsimile Number: (212)
				872-1002
			 

		  
	 	
			 
				To the Purchaser:
			 

		  	
			 
				At the address set forth below his
				name on Exhibit A hereto
			 

		  

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  8.3
				

			 	
				
				  Entire Agreement; Amendments and
				  Waivers.
				

			 

 

	 
		This Agreement (including the schedules and
		exhibits hereto) represents the entire understanding and agreement between the
		parties hereto with respect to the subject matter hereof and can be amended,
		supplemented or changed, and any provision hereof can be waived, only by
		written instrument making specific reference to this Agreement signed by the
		parties hereto. No action taken pursuant to this Agreement, including without
		limitation, any investigation by or on behalf of any party, shall be deemed to
		constitute a waiver by the party taking such action of compliance with any
		representation, warranty, covenant or agreement contained herein. The waiver by
		any party hereto of a breach of any provision of this Agreement shall not
		operate or be construed as a further or continuing waiver of such breach or as
		a waiver of any other or subsequent breach. No failure on the part of any party
		to exercise, and no delay in exercising, any right, power or remedy hereunder
		shall operate as a waiver thereof, nor shall any single or partial exercise of
		such right, power or remedy by such party preclude any other or further
		exercise thereof or the exercise of any other right, power or remedy. All
		remedies hereunder are cumulative and are not exclusive of any other remedies
		provided by law.
	 

	 
			
				
				   
				

			 	
				
				  8.4
				

			 	
				
				  Governing Law.
				

			 

 

	 
		This Agreement shall be governed by and
		construed and enforced in accordance with the laws of the Cayman Islands. Each
		party, for the benefit of the other, hereby irrevocably submits to the
		exclusive jurisdiction of the courts of the Cayman Islands for the adjudication
		of any dispute hereunder or in connection herewith or with any transaction
		contemplated hereby or discussed herein, and hereby irrevocably waives, and
		agrees not to assert in any suit, action or proceeding, any claim that it is
		not personally subject to the jurisdiction of any such court, that such suit,
		action or proceeding is improper. Each party hereby irrevocably waives personal
		service of process and consents to process being served in any such suit,
		action or proceeding by mailing a copy thereof to such party at the address for
		such notices to it under this Agreement and agrees that such service shall
		constitute good and sufficient service of process and notice thereof. Nothing
		contained herein shall be deemed to limit in any way any right to serve process
		in any manner permitted by law.
	 

	 
		 
	 

	 
		7
	 

	 
		 
	 

	 
 

	 
			
				
				   
				

			 	
				
				  8.5
				

			 	
				
				  Section Headings.
				

			 

 

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

	 
			
				
				   
				

			 	
				
				  8.6
				

			 	
				
				  Severability.
				

			 

 

	 
		If any term, provision, covenant or
		restriction of this Agreement is held by a court of competent jurisdiction to
		be invalid, illegal, void or unenforceable, the remainder of the terms,
		provisions, covenants and restrictions set forth herein shall remain in full
		force and effect and shall in no way be affected, impaired or invalidated, and
		the parties hereto shall use their reasonable efforts to find and employ an
		alternative means to achieve the same or substantially the same result as that
		contemplated by such term, provision, covenant or restriction. It is hereby
		stipulated and declared to be the intention of the parties that they would have
		executed the remaining terms, provisions, covenants and restrictions without
		including any of such that may be hereafter declared invalid, illegal, void or
		unenforceable.
	 

	 
			
				
				   
				

			 	
				
				  8.7
				

			 	
				
				  Successors and
				  Assigns.
				

			 

 

	 
		This Agreement shall be binding upon and
		inure to the benefit of and be enforceable by the parties hereto and their
		respective successors and assigns.
	 

	 
			
				
				   
				

			 	
				
				  8.8
				

			 	
				
				  Counterparts.
				

			 

 

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

	 
		* * * * *
	 

	 
		(The Signature Page Follows)
	 

	 
		 
	 

	 
		8
	 

	 
		 
	 

	 
 

	 
		IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
		executed and delivered by their respective duly authorized signatories on the
		date first written above.
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  GREENLIGHT CAPITAL RE, LTD.
				

			 
	
				
				   
				

			 	
				
				

			 	
				
				   
				

			 	
				
				  By: 
				

			 	
				
				  
 
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: 
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Title: 
				

			 

 

	 
		 
	 

	 
		9
	 

	 
		 
	 

	 
 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  By:
				

			 	
				
				  
 
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: 
				

			 

 

	 
		 
	 

	 
		10Exhibit 10.3
	 

	 
		PROMISSORY NOTE
	 

	 
		 
	 

	 
			
				
				  US$24,500,000.00
				

			 	
				
				  August 11, 2004
				

			 

 

	 
		ARTICLE I
	 

	 
		PAYMENT OBLIGATION
	 

	 
		FOR VALUE RECEIVED, the undersigned,
		Greenlight Capital Investors, LLC, a Delaware limited liability company
		(“Maker”), unconditionally promises to pay to the order of
		Greenlight Capital Re, Ltd., a Cayman Islands exempted company with limited
		liability, or its registered assigns (“Payee”), the sum of Twenty Four Million Five Hundred
		Thousand Dollars (US $24,500,000.00), together with interest on the unpaid
		principal balance from time to time outstanding at a rate per annum equal to
		LIBOR (as defined herein) plus 3.0%, which interest shall accrue daily,
		commencing on the date hereof (and, thereafter, from the most recent date that
		interest was paid) and shall be payable in cash annually on August 11 of each
		year (or the immediately succeeding Business Day (as defined herein), if such
		day is not a Business Day) (such date, the “Anniversary Date”), commencing on the Anniversary Date in 2005,
		until the principal amount hereof shall have been paid in full. The principal
		of, and accrued and unpaid interest on, this Promissory Note (this
		“Note”) shall be due and payable in lawful money of the
		United States on the earlier of (a) the Anniversary Date in 2009 or (b) the
		making of demand therefor by Payee following the occurrence and during the
		continuance of an Event of Default (as defined in Article III hereof) or as
		otherwise provided in Article III hereof. Interest hereunder shall be
		calculated on the basis of a year of 360 days and the actual number of days
		elapsed.
	 

	 
		This Note has been executed and delivered
		pursuant to that certain securities purchase agreement by and between Maker and
		Greenlight Capital Re, Ltd., dated as of the date hereof, pursuant to which
		Maker purchased 5,050,000 newly issued Class B ordinary shares, par value $0.10
		per share, of Greenlight Capital Re, Ltd. (the “Class B Ordinary Shares”).
	 

	 
		For the purposes of this Note: (1)
		“LIBOR”
		means the one-year British Bankers Association London Interbank Offered Rate
		Fixing of U.S. Dollar, as published in the Wall Street Journal on the first
		Business Day immediately following the Anniversary Date of each year during the
		term of this Note; provided, that LIBOR for the period from the date hereof
		through the Anniversary Date in 2005 shall be 2.34125% and (2)
		“Business
		Day” means every day other
		than a Saturday, Sunday, or legal holiday in New York, New York or in the
		Cayman Islands.
	 

	 
		Maker shall have the right to prepay the
		principal of this Note in full or in part at any time and from time to time
		without premium or penalty, provided, however, that accrued interest on the
		portion of principal being prepaid shall be due and payable contemporaneously
		with such prepayment of principal.
	 

	 
		ARTICLE II
	 

	 
		AFFIRMATIVE AND NEGATIVE
		COVENANTS
	 

	 
		So long as any of the principal of and
		accrued interest on this Note is outstanding, Maker will comply with each of
		the following covenants:
	 

	 
		 
	 

	 
		1
	 

	 
		 
	 

	 
 

	 
		1. Transfer of Class B Ordinary Shares. In the event that Maker proposes to sell, assign,
		exchange or otherwise transfer or dispose of, directly or indirectly (each, a
		“Transfer”) any Class B Ordinary Shares (including any Class
		A ordinary shares of Payee issuable upon conversion of Class B Ordinary Shares)
		Maker shall (i) provide Payee with notice of such Transfer at least five (5)
		Business Days prior to the closing of such Transfer and (ii) contemporaneously
		with the closing of such Transfer, remit to Payee the proceeds (the
		“Proceeds”) received by Maker in connection therewith,
		provided that the amount of such Proceeds remitted to Payee shall not exceed
		the outstanding principal of, and accrued interest on, this Note as of the date
		of application of such Proceeds. The Proceeds shall first be applied to the
		accrued interest on this Note and, if there is any excess, to the outstanding
		principal of this Note as of the date of application of such Proceeds.
		Notwithstanding the foregoing, Maker shall not be permitted to Transfer any
		Class B Ordinary Shares unless (a) such Transfer is made pursuant to a bona
		fide transaction with a third party, which transaction shall have been
		negotiated in good faith on an arm’s-length basis and (b) the
		consideration to be paid to Maker in connection with such Transfer shall be
		paid in cash at the closing of such Transfer. In furtherance of the foregoing
		Maker hereby acknowledges the lien on the Class B Ordinary Shares granted to
		Payee pursuant to Article 68 of Greenlight Capital Re, Ltd.’s Memorandum
		and Articles of Association, as the same shall exist on the date hereof (the
		“Memorandum and
		Articles”).
	 

	 
		2. Limitation on Indebtedness. Maker will not, without the prior written consent of
		Payee, incur any indebtedness for borrowed money senior or pari passu in right
		of payment to this Note.
	 

	 
		ARTICLE III
	 

	 
		EVENTS OF DEFAULT
	 

	 
		Each of the following shall constitute an
		Event of Default (each, an “Event of Default” and, collectively, the “Events of Default”): 
	 

	 
			
				
				   
				

			 	
				
				  1.
				

			 	
				
				  default in making due and punctual
				  payment of the principal of this Note, or any interest accrued hereon, or any
				  other amount payable hereunder, when and as such payment shall become due and
				  payable, whether at maturity or by acceleration or otherwise, and such payment
				  is not made within five (5) days of written notice received by Maker specifying
				  such default; or
				

			 

 

	 
			
				
				   
				

			 	
				
				  2.
				

			 	
				
				  the failure by Maker to comply with
				  any of the covenants set forth in (i) Article II of this Note or (ii) the
				  Memorandum and Articles with respect to the Transfer of Class B Ordinary
				  Shares; or
				

			 

 

	 
			
				
				   
				

			 	
				
				  3.
				

			 	
				
				  the Transfer by Maker, whether in
				  one or in a series of transactions, of all or substantially all of its assets
				  including, without limitation, the Transfer of all or substantially all of the
				  Class B Ordinary Shares (including any Class A Ordinary Shares of the Company
				  issuable upon conversion of the Class B Ordinary Shares); or
				

			 

 

	 
		 
	 

	 
		2
	 

	 
		 
	 

	 
 

	 
			
				
				   
				

			 	
				
				  4.
				

			 	
				
				  Maker shall admit in writing its
				  inability to, or be generally unable to, pay its debts as such debts become
				  due; or
				

			 

 

	 
			
				
				   
				

			 	
				
				  5.
				

			 	
				
				  Maker shall (i) apply for or consent
				  in writing to the appointment of, or taking possession by, a receiver,
				  custodian, trustee or liquidator of itself or of all or a substantial part of
				  its property, (ii) make a general assignment for the benefit of its creditors,
				  (iii) file a petition seeking to take advantage of any law relating to
				  bankruptcy, insolvency, reorganization, winding-up, or composition or
				  adjustment of debts or (iv) take any action for the purpose of effecting any of
				  the foregoing; or
				

			 

 

	 
			
				
				   
				

			 	
				
				  6.
				

			 	
				
				  a proceeding or case shall be
				  commenced, without the application or consent of the Maker, in any court of
				  competent jurisdiction, seeking (i) Maker’s liquidation, reorganization,
				  dissolution, or winding-up, or the composition or adjustment of its debts, (ii)
				  the appointment of a trustee, receiver, custodian, liquidator or the like of
				  Maker or all or any substantial part of its assets, or (iii) similar relief in
				  respect of Maker under any law relating to bankruptcy, insolvency,
				  reorganization, winding-up or composition or adjustment of debts, and such
				  proceeding or case shall continue undismissed, or an order, judgment or decree
				  approving or ordering any of the foregoing shall be entered and continued
				  unstayed and in effect, for a period of sixty (60) days; or an order for relief
				  against Maker shall be entered in an involuntary case under any law relating to
				  bankruptcy, insolvency, reorganization, winding-up, or composition or
				  adjustment of debts; or
				

			 

 

	 
			
				
				   
				

			 	
				
				  7.
				

			 	
				
				  the security interest of Payee in
				  the Class B Ordinary Shares pursuant to Article 68 of the Memorandum and
				  Articles shall at any time fail to constitute a first and paramount lien and
				  charge in such Class B Ordinary Shares, or Maker shall so assert in writing;
				  or
				

			 

 

	 
			
				
				   
				

			 	
				
				  8.
				

			 	
				
				  either this Note or Article 68 of
				  the Memorandum and Articles shall at any time be declared to be invalid or
				  unenforceable in any material respect, or Maker shall so assert in
				  writing.
				

			 

 

	 
		If an Event of Default occurs under
		paragraphs 1, 2, 3, 7 or 8 above, then and in any such case Payee may declare
		the outstanding principal amount of this Note to be due and payable
		immediately, upon written notice to Maker and, upon any such declaration, the
		outstanding principal amount of this Note, and the interest--accrued thereon,
		together with all costs of collection, including reasonable attorneys’
		fees if collected by law or through an attorney at law (as further set forth in
		Section IV(4) hereof), shall be and become immediately due and payable. If an
		Event of Default occurs under paragraphs 4, 5 or 6 above, then the outstanding
		principal of and all accrued and unpaid interest on this Note shall
		automatically be and become immediately due and payable, without presentment,
		demand, protest, notice of dishonor or other formalities or notice of any kind,
		all of which are hereby expressly waived by Maker.
	 

	 
		ARTICLE IV
	 

	 
		GENERAL
	 

	 
		 
	 

	 
		3
	 

	 
		 
	 

	 
 

	 
		1. Notices.
		All notices, demands and other communications provided for or permitted
		hereunder shall be made in writing and shall be by registered or certified
		first-class mail, return receipt requested, telecopier (with receipt
		confirmed), courier service or personal delivery as follows: (a) if to the
		Maker, at 140 East 45th Street, Floor 24, New York, NY 10017, facsimile
		1-212-973-9219 attention: Daniel Roitman, or at such other address or number as
		the Maker shall have furnished to the Payee in writing, or (b) if to the Payee,
		at Greenlight Capital Re, Ltd., c/o HSBC Financial Services (Cayman) Limited,
		P.O. Box 1109GT, Strathvale House, 90 North Church Street, Grand Cayman, Cayman
		Islands, facsimile 1-345-949-7634, attention: Tom Clark, or at such other
		address or number as the Payee shall have furnished to the Maker in writing.
		All such notices and communications shall be deemed to have been duly given
		when: delivered by hand, if personally delivered; when delivered by courier, if
		delivered by commercial overnight courier service; if mailed, five Business
		Days after being deposited in the mail, postage prepaid; or if telecopied to
		the telecopy number set forth above, when receipt is acknowledged by the
		recipient’s telecopier machine.
	 

	 
		2. Renunciation. Maker hereby waives presentment, demand, protest and
		notice of dishonor or refusal, protest or notice of protest and delay of
		grace.
	 

	 
		3. Waiver. No failure on the
		part of Payee to exercise and no delay in exercising, and no course of dealing
		with respect to, any right, power, privilege or remedy under this Note shall
		operate as a waiver thereof, nor shall any single or partial exercise of any
		right, power, privilege or remedy under this Note preclude any other or further
		exercise thereof or the exercise of any other right, power, privilege or
		remedy. The remedies provided herein are cumulative and not exclusive of any
		remedies provided by law.
	 

	 
		4. Expenses. Maker agrees to
		pay or reimburse Payee for (a) all reasonable out-of-pocket costs and expenses
		of Payee (including, without limitation, the reasonable fees and expenses of
		counsel to Payee), in connection with any amendment, supplement, modification
		or waiver of any of the terms of this Note and (b) all reasonable costs and
		expenses of Payee (including the reasonable fees and expenses of counsel) in
		connection with any default hereunder or Event of Default and any enforcement
		or collection proceedings resulting therefrom. The obligations of Maker under
		this Section (IV)(4) shall survive the repayment of the principal amount of
		this Note.
	 

	 
		5. Amendments. This Note may be
		amended or modified only by an instrument in writing duly executed by Maker and
		Payee. Any amendment or modification effected in accordance with this Section
		IV(5) shall be binding upon Maker and Payee.
	 

	 
		6. Successors and Assigns. This Note shall be
		binding upon; and inure to the benefit of, Maker and Payee and their respective
		successors and assigns. Maker may not assign its rights or obligations under
		this Note without the prior written consent of the Payee. Payee may assign or
		transfer this Note or any rights or obligations hereunder without the prior
		written consent of Maker.
	 

	 
		7. Headings. The section
		headings appearing herein are included solely for convenience of reference and
		are not intended to affect the interpretation of any provision of this
		Note.
	 

	 
		 
	 

	 
		4
	 

	 
		 
	 

	 
 

	 
		8. Severability. If one or more
		provisions of this Note are held to be unenforceable under applicable law, such
		provision(s) shall be excluded from this Note and the balance of this Note
		shall be interpreted as if such provision(s) were so excluded and shall
		otherwise be enforceable in accordance with its terms.
	 

	 
		9. Usury.
		Maker covenants (to the extent that it may lawfully do so) that it will not at
		any time insist upon, plead, or in any manner whatsoever claim or take the
		benefit or advantage of, any stay or extension law or any usury law or other
		law that would prohibit or forgive Maker from paying all or any portion of the
		principal of or interest on this Note, wherever enacted, now or at any time
		hereafter in force, or which may affect the covenants or the performance of
		this Note.
	 

	 
		10. Governing Law; Consent to
		jurisdiction. This Agreement
		shall be governed by and construed and enforced in accordance with the laws of
		the Cayman Islands. Maker hereby irrevocably submits to the exclusive
		jurisdiction of the courts of the Cayman Islands for the adjudication of any
		dispute hereunder or in connection herewith, and hereby irrevocably waives, and
		agrees not to assert in any suit, action or proceeding, any claim that it is
		not personally subject to the jurisdiction of any such court, that such suit,
		action or proceeding is improper. Maker hereby irrevocably waives personal
		service of process and consents to process being served in any such suit,
		action or proceeding by mailing a copy thereof to Maker at the address set
		forth in paragraph 1 of this Article IV and agrees that such service shall
		constitute good and sufficient service of process and notice thereof. Nothing
		contained herein shall be deemed to limit in any way any right to serve process
		in any manner permitted by law.
	 

	 
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		BLANK]
	 

	 
		 
	 

	 
		5
	 

	 
		 
	 

	 
 

	 
		IN WITNESS WHEREOF, the undersigned have
		executed this Note as of the date first above written.
	 

	 
		 
	 

	 
			
				
				  GREENLIGHT CAPITAL INVESTORS,
				  LLC
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  By: 
				

			 	
				
				  
 /s/ David Einhorn
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  Name: 
				

			 	
				
				  David Einhorn
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  Title: 
				

			 	
				
				  Manager
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		6

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