ADMINISTRATION AGREEMENT

(1)

GREENLIGHT REINSURANCE, LTD., a company incorporated under the laws of the Cayman Islands whose registered office is at the offices of the Administrator specified immediately below (the “Company”); and

(2)

HSBC FINANCIAL SERVICES (CAYMAN) LIMITED, a company incorporated under the laws of the Cayman Islands whose registered office is at Strathvale House, 90 North Church Street, P.O. Box 1109GT, George Town, Grand Cayman, Cayman Islands, British West Indies (the “Administrator”).

(A)

The Company is duly licensed to carry on insurance business under the laws of the Cayman Islands.

(B)

The Company has requested the Administrator to provide in the Cayman Islands certain administrative, accounting and banking services which the Administrator has agreed to do subject to the terms and conditions hereinafter appearing.

1.

In this Agreement the following words shall have the following meanings, if not inconsistent with the subject or context:

Words

Meanings

“Articles”

the memorandum of association and articles of association of the Company for the time being in force;

“Directors”

the directors of the Company for the time being or as the case may be the directors assembled as a board;

“Law”

the Companies Law (2003 Revision) of the Cayman Islands;

“Register”

the register of members of the Company;

“Regulations”

the Money Laundering Regulations, 2000 of the Cayman Islands.

2.

The clause headings are included for convenience only and shall not affect the interpretation of this Agreement. References to any provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced from time to time.

3.

The Company hereby appoints the Administrator to be, and the Administrator hereby agrees to act as, administrator of the Company in accordance with the Articles and the terms of this Agreement.

4.

All activities engaged in under the provisions of this Agreement by the Administrator on behalf of the Company shall be subject to the overall policies, directions and control of the Directors.

5.

The Company hereby retains the Administrator and the Administrator agrees to provide such services as are, and subject to the terms and conditions, hereinafter set forth. The Company shall promptly supply to the Administrator, or shall arrange for the Administrator to be supplied with, all such information, documents and instructions as are required by the Administrator to fulfil its obligations hereunder.

6.

The Administrator hereby agrees:

(a)

to perform and provide the services necessary and appropriate to the business of the Company in and from within the Cayman Islands as follows:

(i)

to provide general banking services in such a manner as may be agreed upon in writing from time to time;

(ii)

subject to the Company complying with its obligations under clause 5 hereof, to maintain all reasonable and necessary records and accounts as may be required in the normal course of the Company’s business and in order to comply with any laws or regulations of the Cayman Islands in such manner as may be agreed upon from time to time and in particular without prejudice to generality of the foregoing to maintain the Register and other statutory registers of the Company as well as the Company’s minute book and other corporate records;

(iii)

subject to the Company complying with its obligations under clause 5 hereof, to prepare and submit regular reports not less frequently than monthly to the Company in respect of the Company’s business in such form as may be agreed upon from time to time;

(iv)

to deal with correspondence relating to the Company’s business;

(v)

to provide the services of secretary and/or assistant secretary to the Company and also to make available such members of its staff as may be necessary to carry out efficiently its duties hereunder;

(vi)

to maintain the registered office of the Company at its own offices as set out above and to make available within its premises such non-exclusive space as may be necessary to carry out efficiently its duties hereunder;

(b)

not on behalf of the Company to enter into any contracts of insurance or reinsurance or enter into any commitments, loans or obligations or any loss adjustment, agency or management agreement whatsoever or settle or agree to any claims, disputes, actions or proceedings or charge, mortgage, pledge, encumber or otherwise restrict or dispose of the Company’s property or assets or generally take any action regarding the business of the Company without the prior written approval of the Company and not to hold itself out as permitted to do any of the aforesaid;

(c)

to maintain adequate systems for the verification or identification of (i) all persons interested in the shares or other securities of the Company, whether beneficially or otherwise, and (ii) all original insureds under any of its insurance programmes (but only so long as any such insurance programme falls within the definition of “insurance business” for the purposes of the Regulations) and shall retain or procure the retention of such evidence for a period of not less than five years from the date on which any such person became so interested or insured (as the case may be);

(d)

to keep confidential all documents, materials and other information relating to the business of the Company and, except as required by law, not to disclose any of the aforesaid without the prior consent of the Company, unless it shall in good faith determine that such disclosure is necessary to protect the interests of the Administrator or if the Administrator is required to disclose information by any court or regulatory authority, whether or not in the Cayman Islands, having jurisdiction over the Administrator. In the event such disclosure is necessary, the Administrator, if legally permitted to do so, shall give the Company notice of the information to be disclosed as far in advance of its disclosure as practicable so that the Company may seek, at its sole expense, a protective order or other appropriate remedy, in its sole discretion. In the event that no such protective order or other remedy is obtained, the Administrator may make such disclosure without liability hereunder, provided that the Administrator will furnish only that portion of the confidential information which the Administrator is advised by counsel is legally required;

(e)

to use reasonable efforts to keep the Company informed of all matters necessary to maintain the Company in good standing under the Laws of the Cayman Islands and to keep the Company informed of developments in the Cayman Islands which may affect the business of the Company.

7.

The Administrator shall be at liberty in the performance of its duties and in the exercise of any of the powers and discretions vested in it hereunder to act by responsible officers or a responsible officer for the time being. Further, the Administrator may act or rely upon the opinion or advice of or any information obtained from any broker, lawyer, valuer or other expert whether reporting to the Company or to the Administrator or not and the Administrator shall not be responsible for any loss occasioned by its so acting.

8.

The Administrator may refer any legal question to the legal advisers of the Company for the time being (whose name shall from time to time be notified by the Company to the Administrator) and may authorise any such legal advisers to take the opinion of counsel on any matter or difficulty and may act on any opinion given by such legal advisers or counsel without being responsible for the correctness thereof or for any result which may follow from so doing.

9.

Its duties hereunder shall not preclude the Administrator from providing services of a like nature to any other person, firm or corporation. In so acting, the Administrator shall not be deemed to be affected with notice of, or be under any duty to disclose to the Company, any fact or thing which may come to the knowledge of the Administrator or its servants or agents.

10.

In consideration of the provision of services hereunder, the Administrator shall be entitled to receive fees, calculated from the effective date hereof, at the rates specified in the Schedule hereto (or such rates as may from time to time be adjusted pursuant to the terms hereof) comprising:

(a)

a flat fee, payable on the effective date hereof and on the first day of each quarter thereafter (being 1^st. January, 1st. April, 1st. July and 1^st. October in each year) in respect of the quarter (or partial quarter) in which the same is payable, which fee shall accrue on a daily basis to the date of termination; and

(b)

fees for each manhour worked (calculated on a pro rata basis for any part hours worked) during the preceding quarter or partial quarter, payable on the last day of each quarter and on the date of termination.

11.

In addition to the fees specified in the immediately preceding clause, the Administrator shall be entitled to be reimbursed for all government or similar fees, charges, taxes, duties and imposts whatsoever levied on or in respect of the Company or its business as may be properly incurred, as well as all reasonable out of pocket expenses (including but not limited to telex, telefax, telephone, postage and stationery) as the Administrator may incur in the execution of its duties hereunder. The Administrator may debit the same to the Company’s account with the Administrator at the time they are incurred PROVIDED ALWAYS that the Administrator shall not be obliged to incur any disbursement on the Company’s behalf unless in its sole determination there are sufficient funds standing to the credit of the Company’s account with the Administrator to cover the full amount of all outstanding and anticipated fees and disbursements for the Company.

12.

The Administrator shall be entitled to retain for its own benefit and without accounting therefor any profit arising out of its acting as banker of the Company.