WHEREAS, Clearwater, as Reinsurer and SRUS, as Ceding Insurer, are parties to that certainCoinsurance Retrocession Agreement, effective July 1, 2007 (the “Retrocession Agreement”);          WHEREAS, certain Events of Default described on Exhibit A attached hereto (the“Specified Events of Default”) have occurred and are continuing under the Indenture andcertain other Transaction Documents (as defined in the Indenture) and as a result of the occurrenceof the Specified Events of Default, the Noteholders (i) are entitled as the “DirectingParty” under the Indenture to direct the Indenture Trustee to, *inter alia*, enforce rights andremedies against Clearwater and the Collateral, including, without limitation, the right to accruedefault interest, accelerate and immediately demand payment in full of the Outstanding PrincipalAmount of and accrued but unpaid interest on the Notes and foreclose on the Collateral, (ii) haveno further obligations under the Note Purchase Agreement to fund any Advances (as defined in theNote Purchase Agreement), and (iii) are entitled to take enforcement actions against the Guarantorsunder the Guaranty Agreements and the Guarantors Letter Agreement;          WHEREAS, on May 31, 2008, the Noteholders delivered (i) a Notice of Default under theIndenture and (ii) a Notice of Default under the Note Purchase Agreement to the SRGL Parties; and          WHEREAS, the SRGL Parties have requested, and the Noteholders, have agreed, subject to theterms and conditions of this Agreement, to forbear from exercising certain of their rights andremedies under the Transaction Documents, each as expressly specified herein, during the periodcommencing on the date hereof and ending at 11:59 p.m., Eastern Standard Time, on December 15, 2008(the “Forbearance Period”), unless terminated earlier pursuant to Section 5.          NOW THEREFORE, in consideration of the promises and for other good and valuable consideration,the receipt, adequacy and sufficiency of which are hereby acknowledged by the parties hereto, theSRGL Parties and the Noteholders agree as follows:          **1.****INCORPORATION OF RECITALS****.**The recitals set forth above are hereby incorporatedinto this Agreement as accurate and complete statements of fact and are hereby adopted and made apart hereof.          **2.****DEFINED TERMS****.**Capitalized terms used but not otherwise defined herein shall havethe respective meanings assigned to such terms in the Indenture and the Note Purchase Agreement, asapplicable.          **3.****LIMITED FORBEARANCE****.**(a) Scope of Forbearance. Subject to the terms andconditions of this Agreement, the Noteholders hereby agree during the Forbearance Period to forbearfrom exercising any remedies under the Indenture and the Guaranty Agreements solely with respect tothe Specified Events of Default.          (b) Other Events of Default. For the avoidance of doubt, this forbearance shall applyonly to the Specified Events of Default and not to any other Events of Default, including withoutlimitation, any other existing Events of Default known or not known to the Noteholders or IndentureTrustee as of the date of this Agreement and any other Events of Default occurring on or after thedate hereof, and the Noteholders reserve all of their rights to
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exercise any and all rights and remedies under the Indenture, the other Transaction Documentsand this Agreement upon the occurrence or during the continuance of any such other Event of Defaultat any time, including, without limitation, prior to the date hereof, or before the expiry or afterthe termination of the Forbearance Period.          (c) Delivery of Financial Statements. Notwithstanding the limited forbearance setforth in this Agreement or anything contained in any Transaction Document to the contrary, SRGL,SALIC and SRUS shall deliver copies of all periodic financial statements required to be deliveredto the Noteholders under the Transaction Documents, as follows: (a) the unaudited financialstatements for the quarterly periods ended March 31, 2008, June 30, 2008 and September 30, 2008,the restated financial statements for the quarterly period ended September 30, 2007 and the auditedfinancial statements for the fiscal year ended December 31, 2007 (b) the statutory filings requiredto be delivered to the Noteholders under the Indenture, the Note Purchase Agreement and the otherTransaction Documents and (c) any other financial statements of SRGL, SALIC and SRUS which wouldotherwise have been due and deliverable by the SRGL Parties to the Noteholders under theTransaction Documents prior to December 15, 2008, in each case, immediately upon theirfinalization, and in no event later than 11:59 p.m., Eastern Standard Time, on December 15, 2008.Failure to deliver any of such financial statements and statutory filings by 11:59 p.m., EasternStandard Time, on December 15, 2008 or the failure to satisfy the Net Worth Maintenance Covenant,as amended in accordance with Section 6(c)(2) and (3) hereof, with respect to anymeasurement period during the Forbearance Period shall constitute an Event of Default under theIndenture and shall automatically give the Noteholders the right, without further notice or action,to accelerate the Notes on December 15, 2008 and to pursue all remedies available to theNoteholders under the Indenture and the other Transaction Documents. For the avoidance of doubt,the SRGL Entities, including Clearwater, shall continue to deliver all other reports and financialstatements as required by the Transaction Documents, in each case by the respective due datesspecified therein, including, without limitation, each report, notice and other informationotherwise required to be delivered to the Noteholders as set forth on Exhibit B of the NotePurchase Agreement          (d) Continuance of Reporting Obligations. Notwithstanding the limited forbearance setforth in this Agreement, and subject to