Document:

Asia
Special Situation Acquisition Corp.

    c/o
M&C Corporate Services Limited

    P.O. Box
309GT, Ugland House

    South
Church Street

    George
Town, Grand Cayman

    

    December
18, 2009

    

    
      Stillwater
Capital Partners, Inc.

    

    
      41
Madison Avenue

    

    
      29th
Floor

    

    
      New York,
NY 10010

    

    
      Attn:  Richard
Rudy and Jack Doueck

    

    
      Principals

    

    

    
      Gentlemen:

    

    

    
      This
letter will serve as our mutual agreement and understanding in respect of
certain proposed transactions described below, pursuant to which it is
contemplated that Stillwater Capital Partners, Inc. (“Stillwater”) and its
affiliates, including Richard Rudy and Jack Doueck individually (collectively,
with Stillwater, the “Stillwater Group”)
will assist Asia Special Situation Acquisition Corp., a Cayman Islands special
purpose acquisition corporation (“ASSAC”) in consummating a “business
combination” (as that term is defined in ASSAC prospectus, declared effective by
the SEC on January 16, 2008.

    

    

    
      1.          
The
Transactions.            As we
have discussed, ASSAC desires to consummate by not later than January 23, 2010
(the “Outside Closing
Date”) the acquisition of one or more businesses and/or assets that (a)
have a fair market value of not less than $92.0 million, and (b) are engaged in
investments, financing and the sale of insurance products, or which constitute
portfolios of assets related to the foregoing (collectively, the “Businesses”).

    

    

    
      	  	
              1.1

            	
              Background.

            

    

    

    
      You have
advised that Stillwater and certain of its “Funds” (as hereinafter defined) are
investors in Northstar Group Holdings, Inc. (“Northstar”), an
entity that directly, or through one or more subsidiaries, owns and operates a
reinsurance business located in Bermuda (“Northstar Re
Bermuda”) and a reinsurance business in Ireland (“Northstar Re
Ireland”).

    

    

    
      You have
further advised that Stillwater and its affiliate Stillwater Capital Partners
LLC is the investment manager or general partner of all of the hedge funds and
private equity funds described below (hereinafter collectively referred to as
the “Funds”).  Such
Funds consist of the following, in each of which Stillwater and its affiliate
Stillwater Capital Partners LLC or Stillwater Capital Partners, Inc. is the
investment manager and/or general partner:

    

    

    
      (a)          
Each of
(i) Stillwater Asset Backed Fund, LP, a Delaware limited partnership (“Stillwater Fund Delaware
I”), (ii) Stillwater Asset Backed Fund II, LP, a Delaware limited
partnership (“Stillwater Fund Delaware
II”) and (iii) Stillwater Loan Opportunities Fund LLC, a Delaware limited
liability company (“Stillwater LOF” and
together with Stillwater Fund Delaware I, and Stillwater Fund Delaware II, the
“Stillwater Delaware
Lending Funds”).  According to their offering documents, the
Stillwater Delaware Lending Funds finance portfolios of mostly illiquid and
privately offered short and medium term loans and other asset backed obligations
(“Asset Backed
Loans”) for various types of borrowers, and participate in loans and loan
portfolios of other lenders.  You have advised that as at December 31,
2009, the aggregate net asset value of the Stillwater Lending Funds Delaware is
approximately $103.0 million. (subject to change upon valuation process being
completed in December).

    

    
      
         

      

      
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      (b)           Each of
(i) Stillwater Real Estate Partners LP, a Delaware limited partnership (the
“Stillwater
REP”), and (ii) each of (A) Stillwater WPB Venture Partners I LP, a
Delaware limited Partnership (“Stillwater WPB I”)
and (B) Stillwater WPB Venture Partners II LP, a Delaware limited Partnership
(“collectively, the “Stillwater West Palm Beach
Funds” and with Stillwater REP, the “Stillwater Real Estate
Funds”).  According to its offering documents, the Stillwater
Real Estate Funds are primarily engaged in the purchase of undervalued real
estate, distressed real estate and real estate sold at foreclosure
sales.  The initial capital invested in the real estate assets managed
by the Stillwater Real Estate Funds, including participations in other real
estate loans and real estate syndication interests, was approximately $79.0
million.

    

    

    
      (c)           Each of
(i) Stillwater Market Neutral Fund, LP, a Delaware limited partnership (“SMNF-I”), (ii)
Stillwater Market Neutral Fund II, LP (“SMNF-II”), a Delaware
limited partnership, (and with SMNF-I, collectively, the “SMNF Funds”), and
(iii) Stillwater Matrix Fund LP, a Delaware limited partnership (“Stillwater Matrix Fund
Delaware”).  According to its offering documents, the SMNF
Funds are fund of funds that invest in a portfolio of hedge funds with
diversified investment strategies.  You have advised that as at
December 31, 2009, the aggregate net asset value of the SMNF Funds and the
Stillwater Matrix Fund Delaware (net of debt of approximately $5.0 million) will
be approximately $52.0 million.

    

    

    (d)           Each
of (A) Stillwater Asset Backed Offshore Fund, Ltd., a Cayman Islands exempted
company (“Stillwater
ABOF Cayman”), (B) Stillwater Asset Backed Fund SPV, a Cayman Islands
exempted company (“Stillwater ABF SPV”
), (C) Stillwater Asset Backed Fund II Onshore SPV, a Cayman Islands exempted
company (“Stillwater
ABF II SPV”) and (D) Stillwater Loan Opportunities Fund SPC (“Stillwater LOF
Cayman” collectively with Stillwater ABOF Cayman, Stillwater ABF SPV and
Stillwater ABF II SPV, the  “Stillwater Lending Funds
Cayman”).  You have advised that as at December 31, 2009, the
aggregate net asset value of the Stillwater Lending Funds Cayman will be
approximately $250.0 million.

    

    (e)           Each
of (i) Stillwater Market Neutral Fund Ltd., a Cayman Islands exempted company
(“SMNF-Cayman”); and
(ii) the Stillwater Market Neutral Fund III SPC, a Cayman Islands exempted
company registered as a segregated portfolio company, and its sub funds,
Stillwater Matrix Segregated Portfolio (collectively, “Stillwater Matrix
Cayman”).You have advised that as at September 30, 2009, the aggregate
net asset value of the SMNF-Cayman and Stillwater Matrix Cayman (collectively,
“Stillwater Fund of
Funds Cayman”) is approximately $173.0 million.

    

    
      1.2         The Proposed
Transactions.            With your
assistance, subject to its due diligence and satisfaction of all conditions to
closing, ASSAC will seek to consummate the proposed acquisitions (the “Transactions”):

    

    

    
      (a)           ASSAC
shall undertake to acquire 100% of the capital stock of Northstar for a cash
purchase price of approximately $7.0 million and shall further arrange to
release certain encumbered assets of investor shareholders in Northstar by not
later than June 30, 2010;

    

    
      
         

      

      
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      (b)          ASSAC
shall undertake to acquire either 100% or a substantial majority of the
portfolio of assets or securities (limited partnership interests or shares) of
all or certain of the Funds (collectively, the “Acquired
Assets”).

    

    

    
      The
Acquired Assets of each of the following Funds shall be valued at designated
percentages set forth below of their unaudited estimated net asset value at
December 31, 2009 (the “Estimated NAV”), as
adjusted following the Closing Date to 100% of their independently appraised net
asset value as at December 31, 2009 (“Appraised NAV”), all
as follows:

    

    

    (i)           The
Acquired Assets of the Stillwater Lending Funds Delaware and Stillwater Lending
Funds Cayman (collectively, the “Stillwater Lending
Funds”) would be purchased for 100% of its Estimated NAV which shall be
delivered to ASSAC on or before December 22, 2009;

    

    (ii)          The
Acquired Assets of the Stillwater Real Estate Funds, loan participation
interests and real estate syndication assets would be purchased for 65% of its
initial capital invested;

    

    (iii)         The
Acquired Assets of the SMNF Funds would be purchased for 75% of its Estimated
NAV;

    

    (iv)         The
Acquired Assets of the Stillwater Matrix Cayman Fund would be purchased for 90%
of its Estimated NAV;

    

    (v)          The
Acquired Assets of the SMNF-Cayman Fund would be purchased for 75% of its
Estimated NAV;

    

    (vi)         The
Acquired Assets of the Stillwater Matrix Fund Delaware would be purchased for
90% of its Estimated NAV;

    

    
      (c)          The
purchase values and Merger Consideration for the Acquired Assets would be paid
in the form of shares of ASSAC convertible preferred shares (“ASSAC Preferred
Shares”).  As indicated terms, the ASSAC Preferred Shares
would, pursuant to its terms:

    

    

    (i)           have
a per share liquidation value of $1,000 per share, as a result of which if there
were to be a sale or liquidation of ASSAC prior to
the automatic conversion of the ASSAC Preferred Shares into Ordinary Shares, the
holders of the ASSAC Preferred Shares would be entitled to receive $1,000 for
each such share, before any payments are made with respect to the then
outstanding Ordinary Shares;

    

    (ii)          vote
on an “as converted basis” with the holders of ordinary shares of ASSAC (the
“ASSAC Ordinary
Shares”);

    

    (iii)         pay
a 5% annual dividend (payable semi-annually at the time of conversion in
additional ASSAC Preferred Shares);

    

    (iv)        on
July 31, 2010, automatically
convert into ASSAC Ordinary Shares (the “Conversion Shares”), at a conversion
price of $7.50 per share, subject to certain equitable adjustments for
consolidations, stock splits and the like (the “Conversion Shares”);
and

    
      
         

      

      
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    (v)         contain
mutually acceptable provisions to protect the holders against
dilution.

    

    
      (d)          Following
the Closing, the number of Conversion Shares and the ratio by which each ASSAC
Preferred Share will be converted into Ordinary Shares (the “Conversion Ratio”)
will be subject to post-closing increase or decrease, depending on the Appraised
NAV of each of the Funds, all as set forth in the Transaction Memorandum (Exhibit
A hereto).

    

    

    
      (e)          ASSAC
would agree that on or before six months following the Closing, it will register
the ASSAC Ordinary Shares issuable upon conversion of the ASSAC Preferred Shares
(the “Conversion
Shares”) for resale under the Securities Act of 1933, as amended, so that
such Conversion Shares will be freely tradable by the holders. In the event that
ASSAC does not register the Conversion Shares by July 31, 2010, it will be
required to pay customary financial penalties consistent with other hedge fund
investment documents.

    

    

    
      (f)           As a
condition to Closing ASSAC will acquire all or certain of the above referenced
Acquired Assets having a fair market value (based solely on the purchase price
paid by ASSAC) of not less than $400.0 million and issue not less than 400,000
ASSAC Preferred Shares having a stated or liquidation value of not less than
$400.0 million and convertible into 53.333 million ASSAC Ordinary
Shares.

    

    

    
      (g)          The
anticipated business terms and legal structure of the above acquisitions are set
forth in a transaction memorandum annexed hereto as Exhibit
A and made a part hereof (the “Transaction
Memorandum”).

    

    

    
      2.           
Stillwater
Services:            Both
prior and subsequent to Closing, Stillwater and its principals will assist ASSAC
in achieving the foregoing business combinations and managing the Acquired
Assets (collectively, the “Stillwater
Services”); which Stillwater Services shall include:

    

    

    
      	
               
      

            	
              ·

            	
              Assisting
      ASSAC in negotiating and closing the acquisition of Northstar and
      subsidiaries;

            

    

    
      	
               
      

            	
              ·

            	
              Vote
      Stillwater shares in favor of the Northstar sale to
  ASSAC;

            

    

    
      	
               
      

            	
              ·

            	
              Work
      with related shareholders of Northstar to execute on
  sale;

            

    

    
      	
               
      

            	
              ·

            	
              Negotiating
      for the acquisition of regulatory capital that can be purchased for stock
      and included in Northstar Re Bermuda and Northstar Re
    Ireland;

            

    

    
      	
               
      

            	
              ·

            	
              Assisting
      ASSAC in selecting those of the above referenced Funds to be included in
      the Acquired Assets;

            

    

    
      	
               
      

            	
              ·

            	
              Spearhead
      solicitation of approvals from investors in the designated Funds that the
      Parties agree to include in the Acquired
Assets;

            

    

    
      	
               
      

            	
              ·

            	
              Manage
      the Funds and Acquired Assets;

            

    

    
      	
               
      

            	
              ·

            	
              Originating
      and assisting senior management of ASSAC in consummating additional hedge
      fund acquisitions;

            

    

    
      	
               
      

            	
              ·

            	
              Originating
      and managing a portfolio of asset based loans for the Stillwater Lending
      Funds, if included in the Acquired Assets;
and

            

    

    
      	
               
      

            	
              ·

            	
              Re-invest
      capital generated from liquidation of Acquired
  Assets

            

    

    

    
      3.           
Stillwater
Consideration.  As consideration for the Stillwater Services,
ASSAC hereby agrees, subject at all times to the consummation of the proposed
business combinations, to pay Stillwater or its affiliates, the consideration
set forth below.

    

    
      
         

      

      
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    3.1         Cash
Fee.             a
fee equal to two percent (2%) of the aggregate Purchase Price paid by ASSAC in
cash for Northstar and for the Acquired Assets from the Funds (the “Cash
Fee”).   Such Cash fee shall be payable in full at closing
of the business combinations; provided, that:

    

    (a)           if
the Cash Fee is more than 20% of net cash available to ASSAC after all
redemptions, transaction expenses and payments in connection with the Northstar
acquisition or otherwise (“Net ASSAC Cash”),
then the balance, after payment of as much of the Cash Fee as 20% of the Net
ASSAC Cash will cover, will be in the form of a promissory note of ASSAC,
payable in cash in 6-months after closing and accruing interest at the rate of
7% per annum (the “ASSAC
Note”).

    

    (b)           ASSAC
may extend the payment date of the ASSAC Note for an additional period of
three-months provided that, at the time of the extension, (i) interest shall
accrue at the rate of 12% per annum, and (ii) ASSAC shall make a payment of 20%
of the then outstanding balance of the ASSAC Note.

    

    3.2         Management Agreement.
Stillwater shall receive a three (3) year management agreement to manage the
Acquired Assets, at standard Stillwater fees currently in effect under the
relevant Fund documents.  Such management agreement
shall:

    

    
      	  	
              (a) 

            	
              cover
      all of the Acquired Assets and shall not be terminable for a period of
      three (3) years from closing;

            

    

    
      
        	  	
                (b) 

              	
                be
      automatically renewable for subsequent one-year periods assuming minimum
      return targets of 7% IRR during prior contract
  period;

              

      

    

    
      
        	  	
                (c) 

              	
                be
      automatically renewable for subsequent 2-year periods assuming minimum
      return targets of 8% IRR during prior contract period;
  and

              

      

    

    
      
        	  	
                (d) 

              	
                be
      automatically renewable for subsequent 3-year periods assuming minimum
      return targets of 9% IRR during prior contract
  period.

              

      

    

    

    3.3          ASSAC
Equity.  At closing, Stillwater shall receive 266,666 ASSAC
Ordinary Shares.  These shares will be registered by ASSAC for resale
promptly after the Closing as part of the same registration statement in which
the Conversion Shares are registered.

    

    4.      
     Additional Post-Closing
Agreements.        Subject to
further discussion, analysis and due diligence, the parties presently intend
that following consummation of the Transactions that:

    

    4.1          Cash
generated from the Acquired Assets will be invested as follows:

    

    (a)           approximately:
8% for use in Northstar insurance business as regulatory capital;

    (b)           approximately
20% to buy other assets under management to create more liquidity;
and

    (c)           the
balance will be used to purchase other insurance company assets and invested in
various Stillwater managed funds.

    

    4.2         Additional ABL
Funds.       ASSAC covenants and
agrees that promptly following the Closing it will undertake to raise not less
than $200.0 million over a period to two years (at the rate of approximately
$25.0 million per calendar quarter, commencing with the quarter ending June 30,
2010) for investment in additional domestic or offshore asset backed loan funds
(“ABL Funds”)
or other investments to be managed by Stillwater.  In such connection,
it is our mutual goal that:

    

    (a)           the
majority of such funds will come from the “reserves” of the insurance company
assets (or “floats”); and

    
      
         

      

      
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    (b)           the
balance of such funds will be equity contributed by ASSAC though the public or
private sale of additional ASSAC Ordinary Shares or other ASSAC
securities.  In such connection ASSAC covenants and agrees to (i)
complete the preparation of one or more registration statements or private
placement memorandum with respect to the proposed public or private sale of such
Ordinary Shares or other securities within six months of the Closing, (ii) if
applicable, file such registration statement with the SEC and will cause such
registration statement to be declared effective as soon as practicable
thereafter, and (iii) consummate the sale(s) of such Ordinary Shares or other
securities.

    

    Unless
Stillwater directs otherwise, there will be at least a three year lock up period
on investors’ capital in these additional ABL Funds.   Stillwater
Group, as investment manager and general partner, will receive its standard
management and performance based fees, as are set forth in the various private
placement memoranda and other governing documents for the Funds referred to in
Section 1 above.

    

    5.           Miscellaneous.

    

    (a)           In
order to induce ASSAC to incur the effort and expense of due diligence
examinations and analysis of the proposed Transactions, Stillwater Group hereby,
jointly and severally, agree that, for the period through and including the
earlier of (i) January 31, 2010, or (ii) notice from ASSAC that it is unable or
unwilling to continue to proceed with any of the above Transactions (the “No-Shop Period”),
none of them will elicit, discuss, explore, entertain or consider any possible
sale of all or any part of the securities or assets or any other change in
control of Northstar, Northstar Re Bermuda, Northstar Re Ireland or any of the
Funds (individually a “Target Company” and
collectively, the “Target Companies”)
with any other person, firm or other entity (a “Competitor”) or
provide any information to any such Competitor, other than such ordinary course
of such business operations in circumstances where none of them has any reason
to believe that such information may be used to evaluate a possible purchase or
sale of some or all of the assets or securities of the Target
Companies.  Notwithstanding the foregoing, in the event and to the
extent that ASSAC advises the Stillwater Group in writing, or ASSAC and the
Stillwater Group mutual agree in writing, that a proposed acquisition of
Acquired Assets of any one or more of the Target Companies is not advisable,
practicable or feasible (a “Rejected Target
Company”), then and in such event the provisions of this Section 5(a)
shall thereafter no longer be applicable to such Rejected Target
Company.

    

    (b)           ASSAC
and each of the Stillwater Group agree that during the No-Shop Period they will
undertake to execute a definitive share purchase, asset purchase and/or merger
agreement, as applicable (collectively, “Transaction
Documents”) with Northstar and one or more of the other Target
Companies.  Notwithstanding the foregoing, each of the parties hereto
recognize that consummation of any of the Transactions will require, in addition
to the conditions precedent to be set forth in such Transaction Documents (i)
the consent of the requisite majority of the limited partners or shareholders of
the Funds and the stockholders of Northstar and/or its subsidiaries; and (ii)
the affirmative vote or consent of the holders of a majority of the outstanding
publicly traded ASSAC Ordinary Shares at a shareholders meeting to be held on or
about January 17, 2010 (the “ASSAC Shareholders
Meeting”), and other required conditions specified in the ASSAC
prospectus dated January 17, 2008.  The parties further acknowledge
that time is of the essence as, unless ASSAC is able to consummate the
Transactions or another acceptable business combination by not later than
January 23, 2010, it will likely be forced to liquidate its trust fund and
liquidate as an entity.

    
      
         

      

      
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    In connection with obtaining the
requisite number of “yes” votes required to approve the transactions at the
ASSAC Shareholders Meeting, it is presently contemplated that ASSAC will offer
only to each ASSAC shareholder owning any of the 11.5 million publicly traded
ASSAC Ordinary Shares (the “ASSAC Public Shareholders”), in addition to any cash
payment required, one-third (1/3) of an additional ASSAC Ordinary Share for each
full Ordinary Share owned on the record date of the ASSAC Shareholders Meeting
by such ASSAC Public Shareholder.  In addition, subject to their
agreement to become Chief Executive Officer of ASSAC and a member of the ASSAC
Board of Directors following consummation of the Closing, ASSAC presently
intends to issue additional ASSAC Ordinary Shares and options to Marshall Manley
and Dennis D. Dammerman, respectively, subject to appropriate “clawbacks” and
vesting agreements.

    

    (c)  
       During the No-Shop Period, as
investment manager or general partner, the Stillwater Group shall cause each
Target Company to operate its business in the ordinary course consistent with
past practices and maintain the goodwill of its employees, investors and other
interested parties.  In addition, during the No-Shop Period, unless
otherwise agreed to in writing by ASSAC, subject at all times to its fiduciary
obligations to the Funds and investors in such Funds, the Stillwater Group shall
not take any action in its capacity as general partner or investment manager
that would make the proposed acquisition of the securities of Northstar or the
Acquired Assets of the Funds, impossible or impracticable.

    

    (d)   
      The Stillwater Group will coordinate with
Northstar and the Funds to permit ASSAC, its representatives, accountants and
counsel, to conduct an investigation and evaluation of each of the Target
Companies during the No-Shop Period, and in connection therewith will provide
such assistance to such persons as is reasonably requested.  ASSAC and
its representatives,
subject to the approval of the Stillwater Group (which approval shall not
be unreasonably withheld), Northstar and the Funds, shall be permitted, upon
request and subject to appropriate confidentiality and other safeguards, to
contact and communicate with the bankers, accountants, attorneys, key personnel
and certain material investors in the Target Companies.  ASSAC will
similarly permit the Stillwater Group, its representatives, accountants and
counsel, to conduct an investigation and evaluation of ASSAC during the No-Shop
Period, and in connection therewith will provide such assistance to such persons
as is reasonably requested.  The Stillwater Group and its
representatives, subject to the approval of ASSAC (which approval shall not be
unreasonably withheld), shall be permitted, upon request and subject to
appropriate safeguards, to contact and communicate with the ASSAC’s bankers,
accountants, attorneys, key personnel and other advisors on
request.

    

    (e)          Subject
at all time to the provisions of Section 5(f) below, each of ASSAC and
Stillwater will bear all of their own respective costs and expenses (including,
but not limited to, fees and expenses of legal counsel, accountants, and other
representatives and consultants) incurred in connection with the transactions
contemplated hereby.  In the event that such transactions are
consummated, ASSAC shall promptly pay all of Stillwater’s costs and expenses
incurred in connection with the transactions contemplated hereby or reimburse
Stillwater for any such costs and expenses previously paid.

    

    (f)          ASSAC
hereby covenants and agrees to:

    

    (i)  
         take all steps reasonably
required to obtain the request approvals of the holders of ASSAC publicly traded
Ordinary Shares at the ASSAC Stockholders Meeting, including, without
limitation, (A) mailing a definitive Proxy Statement to such ASSAC Shareholders
as soon as reasonably practicable following execution of the Transaction
Documents, (B) borrowing such amounts from Victory Park or such other lender(s)
as shall be required to obtain assurances of obtaining a sufficient number of
affirmative votes for the proposals contained in such Proxy Statement to obtain
the required number of votes or consents to approve the proposals contained in
such Proxy Statement (the “ASSAC Shareholder
Approvals”); provided,
however, that all of the covenants and agreements of ASSAC contained in
this Section 5(f) are conditional upon and subject to (x) execution of
definitive Transaction Documents in respect of the Northstar acquisition and the
Selected Fund Acquisitions, (y) obtaining the requisite consents and approvals
of the investors or stockholders of Northstar and such Selected Fund
Acquisitions, and (z) compliance by each of Stillwater, Rudy and Doueck with
their agreements set forth in Section 5(g) below; and

    
      
         

      

      
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    (ii)           if
to the extent ASSAC Shareholder Approvals are obtained, at Closing, ASSAC will
have not less than $15.0 million of cash funds available in the Trust Account
described below to (A) purchase Northstar, (B) pay transaction costs and
expenses, and (C) to the extent remaining, provide working capital for
ASSAC.

    

    In the event that, for any reason other
than the failure to satisfy the conditions precedent to ASSAC’s covenants and
agreements set forth above, ASSAC fails to comply with its covenants set forth
in this Section 5(f) and as a result thereof, the transactions contemplated by
this Agreement are not consummated, ASSAC shall be responsible to either pay all
of Stillwater’s costs and expenses incurred in connection with the transactions
contemplated hereby, or reimburse Stillwater for any such costs and expenses
previously paid.

    

    (g)          Stillwater
and its principals, including Rudy and Doueck, hereby covenant and agree to (i)
provide full cooperation and assistance to ASSAC and its representatives in
negotiating and executing Transaction Documents with Northstar and any one or
more of the other Target Companies (the “Selected Fund
Acquisitions”), (ii) provide information with respect to Northstar and
the Selected Fund Acquisitions required for inclusion in such Proxy Statement;
and (iii) use their best efforts to obtain the requisite consents and approvals
of the investors or stockholders of such Selected Fund
Acquisitions.  In connection therewith, Northstar shall be obligated
to bear its own legal and accounting fees and expenses.

    

    (h)          Each
of the Stillwater Group and ASSAC shall be responsible for the payment of 50% of
any finders or origination fee to Jason Huntley or his affiliates, and each of
such parties shall cooperate with a view toward minimizing the amount of such
fee that they will be required to pay.  Unless otherwise agreed, in no
event will either ASSAC or Stillwater be individually responsible to pay a
finders or origination fee in excess of one (1%) percent of the Cash Fee payable
to Stillwater under this Agreement. Except as aforesaid, neither ASSAC nor the
Stillwater Group has incurred or will incur any liability or obligation for all
or any part of any finder's or brokerage fee with respect to the transactions
contemplated hereby which was incurred, or purportedly incurred, by any of
them.

    

    
      (i)          
Each of
ASSAC and the Stillwater Group agree not to make or permit to be made any public
disclosure of the existence of the terms of this letter without the prior
written consent of the others, except as otherwise required by law, including
the Securities Laws, or as advised by legal counsel, and except to their
respective advisors and attorneys.

    

    

    (j)          This
letter agreement shall be governed by and interpreted in accordance with the
laws of the State of New York without giving effect to the conflicts of laws
principles thereof.  The parties hereto hereby irrevocably and
unconditionally consent to the exclusive jurisdiction of the courts located in
New York County, New York in connection with any claims, actions or other
proceeding relating to this letter agreement or the transactions contemplated
hereby.

    

    (k)          Except
(i) for the business and financial terms contained in this letter agreement and
in Exhibit A hereto, which are mutually agreed upon by the parties, and (ii) all
of the provisions of Section 5 hereof which constitute legal and binding
obligations of each of the parties hereto, the legal obligations of the parties
are subject to the negotiation and execution of the Transaction Documents with
Northstar and the other Selected Acquisitions and mutually acceptable management
agreements with the Stillwater Group.

    
      
         

      

      
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    (l)     
      Neither Stillwater, the Stillwater Group,
any of their respective representatives or affiliates shall have any lien,
security interest, claim against or any other right to (a) any of the maximum
$115.0 million principal amount of the proceeds held in that certain trust
administered and maintained by Continental Stock Transfer & Trust Company,
as trustee (and any successor trust or substitute arrangement) for the benefit
of ASSAC and certain of the shareholders of ASSAC (the “Trust”), (b) any
interest earned on such maximum $115.0 million principal amount of proceeds held
in the Trust, or (c) any of the $2,000,000 of interest income proceeds earned on
the proceeds held in such Trust.  Stillwater, on behalf of itself, the
Stillwater Group and each of its representatives and affiliates (including
legal counsel and other professionals retained by Stillwater), does hereby
expressly waive and relinquish any claim or other rights to the Trust, its
corpus or any interest earned thereon.   Notwithstanding the
foregoing, ASSAC hereby acknowledges that it has received approximately $2.5
million in connection with the termination of its proposed agreement with White
Energy Company Limited, and after payment of all accrued debts and obligations
through and including the date hereof, has approximately $0.5 million to defray
transaction expenses contemplated hereby.

    

    (l)           This
agreement may be executed in counterparts.  Facsimile and pdf
signatures hereto shall have the same validity as original signatures
hereto.

    

    Upon execution and delivery of this
letter in the space provided below, ASSAC shall instruct Hodgson Russ LLP, its
legal counsel to begin preparation of the Transaction Documents and other
related agreements, including preparation of the ASSAC proxy statement required
to be mailed to ASSAC shareholders prior to the ASSAC Shareholders
Meeting.

    

     [The
balance of this page intentionally left blank – signature page
follows]

    
      
         

      

      
        - 9
-

        
          

        

      

      
         

      

    

    If the foregoing accurately reflects
the substance of our mutual agreement and understanding, please so indicate by
executing and returning a copy of this letter agreement.  We look
forward to working with you in connection with this Transaction.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Very
      truly yours,

                                  
	 
      
	
                                    ASIA
      SPECIAL SITUATION ACQUISITION CORP.

                                  
	 
      
	
                                    By: 

                                  	
                                    /s/ Gary T.
      Hirst

                                  
	 
      	
                                      Gary
      T. Hirst, President

                                  
	 
      
	
                                    ACCEPTED
      AND AGREED TO

                                  
	
                                    this
      18th
      day of December 2009:

                                  
	 
      
	
                                    STILLWATER
      CAPITAL PARTNERS, INC.

                                  
	 
      
	
                                    By:

                                  	
                                    /s/ Richard
      Rudy

                                  
	 
      	
                                    Richard
      Rudy, Principal

                                  
	 
      
	
                                    /s/ Jack
      Doueck

                                  
	
                                    Jack
      Doueck, Principal

                                  
	 
      
	
                                    As
      to Section 5(a) of this letter agreement:

                                  
	 
      
	
                                    /s/ Richard
      Rudy

                                  
	
                                    Richard
      Rudy

                                  
	 
      
	
                                    /s/ Jack
      Doueck

                                  
	
                                    Jack
      Doueck

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        - 10
-C/O
M & C CORPORATE SERVICES LIMITED

      P.O.
BOX 309GT, UGLAND HOUSE

      SOUTH
CHURCH STREET

      GEORGE
TOWN, GRAND CAYMAN

      CAYMAN
ISLANDS

      

      December
22, 2009

      Northstar
Group Holdings, Inc.

      12 Wesley
Street

      P.O. Box
HM 1641

      Hamilton
HM GX

      Bermuda

      Attn:           John
H. Tweedie, FSA

      President
& Chief Executive Officer

      

      The
Argus Group

      The Argus
Building

      12 Wesley
Street

      P.O. Box
HM 1064

      Hamilton
HM EX, Bermuda

      Attn:           The
Hon. Gerald Simons, OBE

      President
& Chief Executive Officer

      

      
        	
                Commerzbank
      AG

              	 
      	
                Commerzbank
      AG

              
	
                Zentrales
      Geschaftsfeld

              	 
      	
                FIC
      Sales Corporate & Markets

              
	
                Mainzer
      Landstrasse 153

              	 
      	
                P.O.
      Box 52715

              
	
                60327
      Frankfurt am Main

              	 
      	
                30
      Gresham Street

              
	
                Attn:
      Bert Stahlmann,

              	 
      	
                London
      EC2P 2XY

              
	
                Senior
      Director, Structured Insurance Solutions

              	 
      	
                Attn:
      Albert Shamash, MA FIA

              
	 
      	 
      	
                Head
      of Pensions and Insurance Solutions

              

      

      

      Gentlemen:

      

      This
letter will serve as our mutual agreement and understanding in respect of the
proposed transaction described below, pursuant to which it is contemplated that
Asia Special Situation
Acquisition Corp., a Cayman Island corporation (“ASSAC”) will acquire
100% of the share capital and equity of Northstar Group Holdings,
Inc., a Bermuda corporation (“Northstar”).

      

      
        We have
been advised that Northstar through one or more subsidiaries, owns and operates
a reinsurance business located in Bermuda, known as Northstar Reinsurance Ltd.
(“Northstar Re
Bermuda”) and a reinsurance business in Ireland known as Northstar
Reinsurance Ireland Ltd. (“Northstar Re
Ireland”).

      

      
        
           

        

        
          - 1
-

          
            

          

        

        
           

        

      

      
         

        1.       Background.       ASSAC
is proposing to acquire 100% of the share capital and equity of Northstar (the
“Transaction”)
based upon the following information supplied to ASSAC by
Northstar:

        

                  (a)       Capitalization.       Northstar
currently has two classes of equity securities, consisting of (i) common equity,
of which approximately 50% of such common equity has voting rights (the “Voting Shares”) and
(ii) common equity issued to the “Northstar Investors” (defined below), the
value of which are based upon each holder’s pro-rata interest in the total Net
Asset Value (“NAV”) of the
portfolio of securities and assets (currently about $120.0 million) contributed
by such Northstar Investor to Northstar (the “Tracking
Shares”).  The Tracking Shares represent 100% of the economic
value of the equity of Northstar.   NAV is essentially the fair
market value of the assets, less indebtedness and other liabilities attributable
thereto.

        

                         
    (i)       Tracking
Shares              Two
of the Stillwater Funds (Stillwater Market Neutral Fund, LP and Stillwater
Market Neutral Fund II, LP, both Delaware limited partnerships), GMM, Star
Navigator and The Argus Group (collectively, the “Northstar Investors”)
contributed all of the assets to Northstar and to its subsidiaries
(Northstar  Re Bermuda and Northstar Re Ireland) for regulatory
capital and own 100% of the Tracking Shares.

        

                         
    (ii)        Outstanding
Shares.       The Northstar Investors
own about 70% of the outstanding common shares, and the balance are
approximately owned (w) Commerzbank AG (15%), (x) Daniel Gray (5%), (y) James
Dallas (5%) and (z) John Tweedie, President and CEO of Northstar (5%). Some
former directors and employees have a very small number of shares.

        

                         
    (iii)       Voting
Shares.       Are owned as
follows:  (1) Stillwater Funds 19.744%; (2) GMM (9.872%), (3) Argus
(19.846%), (4) Koala (3.116%), (5) Star Navigator (5.988%), (6) Tweedie
(9.872%), (7) Dallas (9.872%) (8) Gray (9.872%) and (9) three former employees
or directors (11.817%).

        

                  (b)       Letter of
Credit.         Commerzbank
AG, formerly Dresdner Bank AG, New York Branch (the “Northstar Senior
Lender”) has issued two outstanding letters of credit in an aggregate
amount of $45.0 million (the “L/Cs”) under the
Amended and Restated Letter of Credit Agreement, dated December 16, 2004, among
Northstar, Northstar Re Bermuda, Northstar Re Ireland (as a designated
subsidiary) and the Northstar Senior Lender (the “L/C Facility
Agreement”), which are secured by a lien on all of the assets of
Northstar, Northstar Re Bermuda and Northstar Re Ireland, including the Tracking
Shares and all of the $120.0 million assets and securities contributed by the
Northstar Investors (the “Northstar Investor
Assets”).  The L/Cs, in turn, secure the obligations of
Northstar Re Ireland and Northstar Re Bermuda to their insurer clients (“Cedents”) under
reinsurance contracts currently in force (“Treaties”).  In
addition, the Northstar Senior Lender has provided a $10.0 million line of
credit to Northstar which is fully drawn (the “Line of
Credit”).  Accordingly, a total of approximately $55.0 million,
plus accrued interest thereon, is currently or contingently owed to the
Northstar Senior Lender (collectively, the “Northstar Senior
Debt”).

        

                  (c)       Composition and Allocation
of
Capital.          The
approximately $120.0 million NAV of the Northstar capital consists of
approximately $50.0 million of assets provided by The Argus Group (“Argus”), of which
$16.25  million is a demand note issued by Argus and $30.0 million are
mutual fund assets owned by Argus.  The balance of $70.0 million is
composed of illiquid hedge funds assets provided by the Stillwater Funds, GMM
and Star Navigator. The capital has been allocated approximately as follows: (i)
$12 million to Northstar Re Bermuda, (ii) $68.0 million (including 100% of the
assets contributed by Argus) to Northstar Re Ireland, and (iii) the balance is
retained by Northstar.

        

        
          
            
            

          

          
            - 2
-

            
              

            

          

          
            
            

          

        

         

                  (d)       Shareholder and Senior
Lender Transaction
Requirements.       The Northstar
Investors (who own in the aggregate 56.2% of the Voting Shares) desire to have
their Tracking Shares and capital released from the lien and charge over assets
held by the Northstar Senior Lender.   Similarly, the Northstar
Senior Lender desires to either (i) terminate the L/C and be repaid its line of
credit, or (ii) renegotiate the L/C on mutually acceptable terms with substitute
collateral acceptable to the Northstar Senior Lender.

        

                  (e)       Requisite Vote and
Approval.         In order
to consummate the acquisition of Northstar, through the merger transaction
described below, (i) the approval and consent of the holders of 66.0% or more of
the Voting Shares of Northstar, (ii) the approval or consent of Northstar
Investors owning 90% or more of the Tracking Shares, and (iii) the approval and
consent of the Northstar Senior Lender, is required.

        

        2.       Terms of
Acquisition.

        

                  (a)       Merger
Transaction.       ASSAC shall form a
new wholly-owned Bermuda subsidiary (“Mergerco”).  ASSAC
and Northstar Mergerco shall enter into an agreement and plan of merger with
Northstar (the “Merger
Agreement”).  Pursuant to the Merger Agreement, Mergerco will
be merged with and into Northstar with Northstar as the surviving corporation of
the merger (the “Merger”).  As
a result, upon consummation of the Merger, ASSAC shall own of record and
beneficially 100% of the Northstar outstanding common shares, 100% of the
Northstar voting shares, and 100% of the Northstar Tracking Shares of Northstar
(collectively, the “Northstar
Equity”).

        

                  (b)       Merger
Consideration.       At Closing of the
Merger, ASSAC shall:

        

                             (i)       (i)       Pay
$7,000,000 in cash in  immediately available funds to Northstar, of
which (A) are amounts (estimated at approximately $2,000,000) required to retire
certain obligations of Northstar; and (B) the balance will be credited to
internal Northstar accounts maintained to reflect the net obligations of
Northstar to the Northstar Investors and the Northstar Senior Lender based upon
their respective interests in the Northstar Tracking Shares and the provisions
of the L/C Facility Agreement.  As a result of the Merger, 100% of the
common equity, Voting Shares and Tracking shares of Northstar shall be owned by
ASSAC.

        

                             (ii)       Issue
to the Northstar Investors (in pro-rata amounts equal to their respective
percentage interests in the Tracking Shares) ASSAC’s limited recourse
non-interest bearing $120.0 million performance note (the “ASSAC
Note”).  The ASSAC Note shall, inter alia:

        

                                       
(A)       be due and payable on or before
June 30, 2010;

        

                                       
(B)       be unconditionally guaranteed by
all ASSAC Subsidiaries (including Northstar, its subsidiaries and the
“Stillwater Funds Subsidiaries” described below (collectively, the “ASSAC Note
Guarantors”).

        

                                      
(C)       at all times subject and
subordinated in a manner consented and acceptable to the Northstar Senior Lender
(which consent may be withheld, conditioned or delayed by the Northstar Senior
Lender in its sole and absolute discretion) to the prior lien and security
interest of the Northstar Senior Lender in the assets of Northstar, Northstar Re
Bermuda and Northstar Re Ireland, be secured by a pledge of all of the Northstar
Tracking Shares and a security interest in all of the underlying portfolio of
assets and securities provided by Argus and all of the other Northstar Investors
(the “Northstar
Investor Assets”); and

        

                                       
(D)       be deemed to be “paid and
performed” in full at any time on or before the June 30, 2010 maturity date upon
a release of all of the Northstar Investor Assets from the lien of the Northstar
Senior Lender securing the existing L/Cs and other Northstar Senior Debt, and a
return of all such Northstar Investor Assets to the Northstar
Investors.

        

        
          
            
            

          

          
            - 3
-

            
              

            

          

          
            
            

          

        

          
       (c)       Event of
Default.       In the event that by
June 30, 2010, the Northstar Note shall not have been “paid and performed” in
full by the return of all such Northstar Investor Assets to the Northstar
Investors, then and in such event an “event of default” under the ASSAC Note
shall have occurred.  In such event, and in order to release the liens
on the Northstar Investor Assets and return such Northstar Investor Assets,
ASSAC and the ASSAC Note Guarantors shall be required to:

        

            
                 (i)       either
replace the existing Northstar Senior Lender aggregate $45.0
million  L/Cs with new letters of credit issued by one or more other
lending institutions, or cause Northstar and its subsidiaries to terminate all
Treaties in accordance with their terms, obtain releases of all regulatory
capital and terminate the Northstar Senior Lender L/Cs, and

        

              
               (ii)       upon
closing of the Merger, repay the existing $10.0 million line of credit in full,
either by liquidation of assets from the Stillwater Funds described below or
from ASSAC working capital.

        

                 
(d)       Certain Covenants and
Additional
Collateral.         ASSAC
shall covenant and agree in the Merger Agreement that prior to June 30, 2010 (i)
neither it nor any of its direct or indirect Subsidiaries (including Northstar
Re Bermuda and Northstar Re Ireland) shall take any action to terminate any of
the Treaties or take any action that would reasonably be expected to result in a
draw by any beneficiary under any outstanding L/C, (ii) it and each of its
direct and indirect Subsidiaries (including Northstar Re Bermuda and Northstar
Re Ireland) shall use each of their respective commercially reasonable efforts
to prevent a draw by any beneficiary under any outstanding L/C, and (iii) it
shall repay or cause to be repaid to the Northstar Senior Lender any amounts
drawn under such L/Cs, whether in connection with a termination of any of the
Treaties or otherwise.  To secure such covenants, on the Closing Date
of the Merger, ASSAC shall (A) guaranty to indemnify, defend and hold harmless,
the Northstar Senior Lender from any losses incurred by it in the event and to
the extent that the existing L/Cs shall be drawn upon (the “ASSAC Guaranty”), and
(B) secure such ASSAC Guaranty and the foregoing covenants by granting to the
Northstar Senior Lender a security interest in the form of a pledge or charge
over the shares or equity of one or more Stillwater Fund Subsidiaries acquired
by ASSAC on the Closing Date of the Merger that own portfolios of assets and
securities having an aggregate NAV of not less than $120.0 million (the “Pledged Collateral”);
which Pledged Collateral shall be independent of and unrelated to the portfolio
of assets and securities contributed to the capital of Northstar Subsidiaries by
the Northstar Investors.

        

        3.       Transaction with Northstar
Senior Lender.       ASSAC and
Stillwater hereby propose the following agreement in principle with the
Northstar Senior Lender, to be implemented on or before June 30,
2010:

        

          
       (a)       ASSAC
and the Northstar Senior Lender will seek to:

        

                             (i)
retain the L/Cs in force; provided that the Northstar Senior Lender shall
receive more commercially attractive terms for retaining the L/Cs and substitute
collateral acceptable to the Northstar Senior Lender; and

        

                             (ii)  amend
and restate the Line of Credit, all upon such terms and conditions as shall be
acceptable to the Northstar Senior Lender (collectively, the “Restated Northstar Senior
Debt”).

        

        
          
            
            

          

          
            - 4
-

            
              

            

          

          
            
            

          

        

         

                  (b)       In
the event that by June 30, 2010, for any reason or no reason, ASSAC, Stillwater
and the Northstar Senior Lender are unable to reach mutual agreement to retain
the L/Cs in force pursuant to duly executed agreements evidencing such Restated
Northstar Senior Debt, then and in such event ASSAC shall cause the Northstar
Senior Lender’s L/Cs to be terminated in a manner that results in no liability
or obligation of the Northstar Senior Lender and ASSAC and each of its direct
and indirect Subsidiaries shall jointly and severally indemnify the Northstar
Senior Lender for any such liability or obligation incurred as a result of or
related to such termination..

         

                 
(c)        The negotiation and execution of
the Restated Northstar Senior Debt with the Northstar Senior Lender shall be
subject to ASSAC and Northstar providing to the Northstar Senior Lender with
Pledged Collateral that shall be acceptable to the Northstar Senior Lender in
the exercise of its sole discretion.  In such connection, it is
contemplated that a minimum of approximately $120.0 million of appraised
NAV of the Pledged Collateral will be offered to the Northstar Senior Lender to
collateralize the Restated Northstar Senior Debt to induce the Northstar Senior
Lender to release its liens and charges over the Northstar Investor
Assets.  As set forth below, the proposed $120.0 million of Pledged
Collateral will include NAV of the Stillwater Funds that will have been
appraised by Houlihan Smith, before
the consummation of the Northstar Merger, and in essence audited and written
down to current net realizable values.

        

        It should
be noted that the approximately $50.0 million of collateral provided by Argus
for the existing Northstar Senior Debt has been transferred to Northstar Re
Ireland, represents regulatory capital for Northstar Re Ireland and cannot be
released without the consent of the Irish insurance regulators – as such the
Northstar Senior Lender in essence holds a lien subordinated to the insurance
regulation requirements on such collateral.  In the event ASSAC and
the Northstar Senior Lender are unable to reach an agreement regarding the
foregoing, ASSAC shall undertake to provide for a new $45.0 million letter of
credit [and a substituted line of credit] for Northstar prior to the maturity
date of the ASSAC Note.

        

        Consummation
of the transaction with the Northstar Senior Lender will follow the closing of
the Northstar Merger and be subject to receipt of such NAV appraisals of the
pledged Stillwater Funds assets.

        

               
  (d)        By its execution of
this letter, the Northstar Senior Lender hereby confirms its willingness to (a)
entertain, consider and discuss with ASSAC the above refinancing proposal
referred to in this Section 3, and (b) review and analyze the proposed
substituted collateral offered by ASSAC to secure any Restated Northstar Senior
Debt; provided,
however, that such confirmation by the Northstar Senior Lender shall
not
constitute (i) a loan commitment, agreement or agreement to agree by the
Northstar Senior Lender as to any or all of the above terms, or any other terms
and conditions with respect to refinancing the Northstar Senior Debt or (ii) the
consent or approval by the Northstar Senior Lender to the Merger or any other
business combination transaction.  In the event that by May 31, 2010,
ASSAC and the Northstar Senior Lender are unable to reach a mutual agreement as
to any proposed Restated Northstar Senior Debt and enter into a definitive
agreement with respect thereto, then and in such event, ASSAC shall be obligated
to cause the Northstar Senior Debt to be paid in full by not later than June 30,
2010; such payment to be consummated as set forth by terminating the existing
L/Cs or replacing such L/Cs with new letters of credit from other issuing
lenders.

        

            
     (e)       Notwithstanding
anything contained herein to the contrary, the parties hereto agree and
acknowledge that nothing herein shall be construed as an agreement or other
commitment by the Northstar Senior Lender to provide its approval or consent to
the proposed Transaction or any aspect thereof and nothing herein shall be
construed as an indication of such approval or consent.  The decision
of the Northstar Senior Lender to approve or consent to the any aspect of the
proposed Transaction upon a request therefor shall be solely in the discretion
of the Northstar Senior Lender.

        

        
          4.       Stillwater
Funds.       Stillwater Capital
Partners, Inc. (“Stillwater”) and its
affiliate Stillwater Capital Partners LLC is the investment manager or general
partner of the hedge funds described below (hereinafter collectively referred to
as the “Stillwater
Funds”).  Such Stillwater Funds consist of the
following:

        

        

        
          
            
            

          

          
            - 5
-

            
              

            

          

          
            
            

          

        

        
           

                   
(a)       Each of (i) Stillwater Asset Backed
Offshore Fund, Ltd., a Cayman Island exempted company (“Stillwater Fund
Cayman”); (ii) Stillwater Asset Backed Fund, LP, a Delaware limited
partnership (“Stillwater Fund Delaware
I”) and (iii) Stillwater Asset Backed Fund II, LP, a Delaware limited
partnership (“Stillwater Fund Delaware
II” and together with Stillwater Fund Cayman and Stillwater Fund Delaware
I, the “Stillwater
Lending Funds”).  The Stillwater Lending Funds invest in short
and medium term loans and other asset backed obligations for various types of
borrowers, and participate in loans and loan portfolios of other
lenders.  ASSAC is advised by Stillwater that as at December 31, 2009,
the aggregate NAV of the Stillwater Lending Funds will be approximately $440.0
million. (subject to adjustments to such NAV based upon independent appraisals
completed and to be completed prior to June 30, 2010).

        

        

        
                    (b)       Stillwater
Real Estate Partners LP, a Delaware limited partnership (the “Stillwater Real Estate
Fund”).  The Stillwater Real Estate Fund is primarily engaged
in the purchase of undervalued real estate, distressed real estate and real
estate sold at foreclosure sales.  The initial capital invested in
2005 in the real estate assets managed by the Stillwater Real Estate Fund,
including participations in other real estate loans and real estate syndication
interests was approximately $84.0 million. Stillwater has advised that as at
December 31, 2009 the aggregate NAV of the Stillwater Real Estate Fund will be
approximately $56.0 million. (subject to adjustments to such NAV based upon
independent appraisals completed and to be completed prior to June 30,
2010).

        

        

        
                   
(c)       Each of (i) Stillwater Market
Neutral Fund, LP, a Delaware limited partnership (“SMNF-I”), (ii)
Stillwater Market Neutral Fund II, LP (“SMNF-II”), a Delaware
limited partnership, and (iii) Stillwater Market Neutral Fund Ltd., a Cayman
Island exempted company (“SMNF-Cayman” and with
SMNF-I and SMNF-II, collectively, the “SMNF
Funds”).  The SMNF Funds are fund of funds that invest in a
portfolio of hedge funds with diversified investment
strategies.  Stillwater has advised that as at December 31, 2009, the
aggregate net asset value of the SMNF Funds will be approximately $67.5 million
(subject to adjustments to such NAV based upon independent appraisals completed
and to be completed prior to June 30, 2010).

        

        

        
                   
(d)       Each of (i) The Stillwater Matrix
Fund LP, a Delaware limited partnership (“Stillwater Matrix”),
and (ii) The Stillwater Market Neutral Fund III SPC, a Cayman Island exempted
company, and its sub funds, Stillwater Matrix PC (collectively, “Stillwater Matrix
Cayman” and with Stillwater Matrix, the “Matrix Funds”) invest
in a portfolio of hedge funds focused on the Asset Based Lending space
Stillwater has advised that as at December 31, 2009, the aggregate net asset
value of the Matrix Funds and the Sub Funds will be approximately $158.0 million
(subject to adjustments to such NAV based upon independent appraisals completed
and to be completed prior to June 30, 2010).

        

        

          
       (e)       Simultaneous
with, or immediately prior to the acquisition of Northstar, ASSAC will acquire
all of the Stillwater Funds and their assets, subject to their liabilities, in
exchange for ASSAC convertible Preferred Shares.  The purchase prices
for such Stillwater Funds shall be based upon the appraised
NAV of such Stillwater Funds.  At Closing, substantially all of the
equity of the Stillwater Funds shall be contributed by ASSAC to Northstar Re
Bermuda and Northstar Re Ireland.

        

        5.       Definitive Agreement and
Closing Conditions.  The Transaction is subject to the
negotiation, execution and delivery of a mutually acceptable definitive Merger
Agreement among ASSAC, Mergerco and Northstar providing for the consummation of
the Transaction (the “Definitive
Agreement”) on the terms described herein and containing representations,
warranties, covenants, indemnities and other terms and conditions customary in
such transactional agreements.  In connection therewith, the parties
agree that the Definitive Agreement shall, inter
alia, contain the following provisions and closing
conditions:

        

        
          
            
            

          

          
            - 6
-

            
              

            

          

          
            
            

          

        

         

                  (a)       ASSAC
shall have conducted and shall be satisfied with the results of its legal,
financial and commercial due diligence investigation of Northstar and its
subsidiaries;

        

                 
(b)        ASSAC shall have completed a
business, financial, legal and other due diligence investigation with respect to
the Company and its business (the “Due Diligence
Investigation”) that shall be satisfactory to ASSAC;

        

                 
(c)       ASSAC shall have completed, through
subsidiary entities (the “Stillwater Funds
Subsidiaries”) the acquisition of the Stillwater Funds and shall have
contributed the equity of the Stillwater Funds Subsidiaries to Northstar Re
Bermuda and Northstar Re Ireland;

        

                 
(d)       The Northstar Senior Lender shall
have consented to the Merger in writing and ASSAC and the Northstar Senior
Lender shall have entered into a definitive agreement with respect to the L/Cs,
the L/C Facility Agreement and the other Transaction Documents (as defined in
the L/C Facility Agreement), that shall be satisfactory to the Northstar Senior
Lender, ASSAC and Northstar;

        

          
       (f)       The
holders of not less than 66% of the Voting Shares of Northstar and 90% of the
Northstar Investors holding the Tracking Shares, shall have approved the Merger,
the Definitive Agreement and all of the transactions contemplated
thereby;

        

              
   (g)       The a majority of
the limited partners of the Stillwater Funds organized in the State of Delaware
and the boards of directors of each of the Stillwater Funds organized under the
laws of the Cayman Islands shall have approved the acquisition(s) by ASSAC of
such Stillwater Funds;

        

          
       (h)       Northstar
shall have obtained all required tax clearances;

        

              
   (i)       All material
regulatory filings, consents and approvals shall have been obtained, including,
without limitation, the approval or non-disapproval of the Irish Financial
Services Regulatory Authority and the Bermuda Monetary Authority to the extent
applicable;

        

                 
(j)       The aggregate NAV of all of the
Stillwater Funds as at the Closing Date shall not be less than $250.0
million;

        

                
 (k)       ASSAC shall have received
financial statements of each of Northstar, Northstar Re Bermuda and Northstar Re
Ireland which shall consist of balance sheets, statements of income and
operations, and statements of cash flows, with appropriate footnotes that have
been audited by PCAOB qualified accountants and auditors as at March 31, 2009
and March 31, 2008 and for the two fiscal years then ended, and unaudited
financial statements for the comparative six month periods ended September 30,
2009 and 2008, respectively;

        

             
    (l)       The
acquisition of certain Stillwater Fund Subsidiaries by ASSAC and/or one or more
of its Subsidiaries shall have been consummated on or prior to the consummation
of the Merger.

        

              
   (m)       Customary
provisions pursuant to which the parties thereto will indemnify one another;
and

        

        
          
            
            

          

          
            - 7
-

            
              

            

          

          
            
            

          

        

           

          
       (n)       Closing
of the Transaction shall be subject to the absence of any material adverse
change in the operations, assets, results of operations, or condition, financial
or otherwise, of the Northstar Group and ASSAC through the Closing
Date.

        

        6.       Miscellaneous.

        

               
  (a)       In order to induce
ASSAC to incur the effort and expense of due diligence examinations and analysis
of the proposed Transactions, each of (i) Northstar on behalf of itself and its
Northstar Re Bermuda and Northstar Re Ireland Subsidiaries (collectively, with
Northstar, the “Northstar Group”) and
each of  Stillwater and Argus (the “Northstar
Affiliates”) hereby, jointly and severally, agree that, for the period
through and including the earlier of (i) January 23, 2010, or (ii) notice from
ASSAC that it is unable or unwilling to continue to proceed with any of the
above Transaction (the “Negotiation Period”),
none of them will accept a proposal for any possible sale of all or any part of
the securities or assets or any other change in control of any member of the
Northstar Group from any other person, firm or other entity (a “Competitor”); provided, however, that nothing
contained herein shall require the Northstar Group or the Northstar Affiliates
to (i) discontinue discussions with any Competitor or (ii) refrain from
initiating discussions or responding to any proposal or other inquiry form any
Competitor, in each case, regarding a possible sale of all or any part of the
securities or assets or any other change in control of any member of the
Northstar Group or any other transaction.  Notwithstanding the
foregoing, in the event and to the extent that ASSAC advises Northstar in
writing, or ASSAC and Northstar mutual agree in writing, that the proposed
Transaction between ASSAC and Northstar is not advisable, practicable or
feasible, then and in such event the provisions of this Section 5(a) shall
thereafter no longer be applicable.

        

              
   (b)       ASSAC and each of
the Northstar and the Northstar Affiliates agree that during the Negotiation
Period they will undertake to execute a Definitive Agreement as soon as
practicable and in no event later than January 5,
2010.  Notwithstanding the foregoing, each of the parties hereto
recognize that consummation of the Transaction will require, in addition to the
conditions precedent to be set forth in herein and in the Definitive Agreement
(i) the consent of the requisite majority of the holders of Voting Shares of
Northstar and the Northstar Investors; and (ii) the affirmative vote or consent
of the holders of a majority of the outstanding publicly traded ASSAC Ordinary
Shares at a shareholders meeting to be held on or about January 17, 2010 (the
“ASSAC Shareholders
Meeting”), and other required conditions specified in the ASSAC
prospectus dated January 17, 2008.  The parties further acknowledge
that time is of the essence as, unless ASSAC is able to consummate the
Transactions or another acceptable business combination by not later than
January 23, 2010, it will likely be forced to liquidate its trust fund and
liquidate as an entity. Other than the requisite shareholder approvals and
consents to be obtained at the ASSAC Shareholders Meeting, no other consents or
regulatory approvals are required on the part of ASSAC to enable it to
consummate the transactions contemplated hereby.

        

           
      (c)       During
the Negotiation Period Northstar shall and shall cause each member of the
Northstar Group to operate its business in the ordinary course consistent with
past practices and maintain the goodwill of its employees, investors and other
interested parties.  In addition, during the Negotiation Period,
unless otherwise agreed to in writing by ASSAC, subject at all times to its
fiduciary obligations to the Northstar Investors and the Senior Lender,
Northstar shall not take any action that would make the proposed Transaction,
impossible or impracticable.

        

                
 (d)       Northstar will permit ASSAC,
its representatives, accountants and counsel, to conduct an investigation and
evaluation of each of the Northstar Group during the Negotiation Period, and in
connection therewith will provide such assistance to such persons as is
reasonably requested.  ASSAC and its representatives, subject to the approval of
Northstar (which approval shall not be unreasonably withheld), shall be permitted, upon
request and subject to appropriate safeguards, to contact and communicate with
the bankers, accountants, attorneys, key personnel and certain material
investors in the Northstar Group.  ASSAC will similarly permit
Northstar, its representatives, accountants and counsel, to conduct an
investigation and evaluation of ASSAC during the Negotiation Period, and in
connection therewith will provide such assistance to such persons as is
reasonably requested.  Northstar and its representatives, subject to
the approval of ASSAC (which approval shall not be unreasonably withheld), shall
be permitted, upon request and subject to appropriate safeguards, to contact and
communicate with the ASSAC’s bankers, accountants, attorneys, key personnel and
other advisors on request.

         

        
          
             

          

          
            - 8
-

            
              

            

          

          
             

          

        

         

              
   (e)       ASSAC and
Northstar will each bear all of their respective costs and expenses (including,
but not limited to, fees and expenses of legal counsel, accountants, and other
representatives and consultants) in connection with the transactions
contemplated hereby.

        

        
                   
(f)       Each of ASSAC and Northstar agree
not to make or permit to be made any public disclosure of the existence of the
terms of this letter without the prior written consent of the others, except as
otherwise required by law, including the Securities Laws, or as advised by legal
counsel, and except to their respective advisors and
attorneys.

        

        

         
       (g)       This
letter agreement shall be governed by and interpreted in accordance with the
internal laws of the state of New York without giving effect to the conflicts of
laws principles thereof.  The parties hereto hereby irrevocably and
unconditionally consent to the exclusive jurisdiction of the courts located in
the state of New York in connection with any claims, actions or other proceeding
relating to this letter agreement.

        

             
    (h)       (i) this
letter reflects the present intent of the parties to proceed with the due
diligence of the Northstar Group by ASSAC, the negotiation and execution of the
Definitive Agreement and the consummation of the proposed Transaction, all upon
the terms and conditions described above and such other terms and conditions as
are mutually acceptable;

        

                             
(ii)the parties agree and acknowledge that this letter constitutes a non-binding
letter of intention and that no party hereto shall have any obligation to reach
agreement on or to negotiate toward or to continue to proceed with consideration
of the proposed Transaction or otherwise to consummate the proposed Transaction;
and

        

                             
(iii) except for the provisions of this Section 6, which the parties agree
create legal and binding obligations, this letter is not intended to and does
not create any legal obligation or enforceable right.

        

                
 (i)       Neither Northstar, the
Northstar Group, any Northstar Affiliate or any of their respective
representatives or affiliates shall have any lien, security interest, claim
against or any other right to (A) any of the maximum $115.0 million principal
amount of the proceeds held in that certain trust administered and maintained by
Continental Stock Transfer & Trust Company, as trustee (and any successor
trust or substitute arrangement) for the benefit of ASSAC and certain of the
shareholders of ASSAC (the “Trust”), (B) any
interest earned on such maximum $115.0 million principal amount of proceeds held
in the Trust, or (C) any of the $2,000,000 of interest income proceeds earned on
the proceeds held in such Trust.  Northstar, on behalf of itself, the
Northstar Group and each of its representatives and affiliates (including
legal counsel and other professionals retained by Northstar), does hereby
expressly waive and relinquish any claim or other rights to the Trust, its
corpus or any interest earned thereon.

        

              
   (j)       This agreement
may be executed in counterparts.  Facsimile and pdf signatures hereto
shall have the same validity as original signatures hereto.

        

        
          
            
            

          

          
            - 9
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               Upon
execution and delivery of this letter in the space provided below, ASSAC shall
instruct Hodgson Russ LLP, its legal counsel to begin preparation of the
Definitive Agreement and other related agreements.

        

        [the
balance of this page intentionally left blank, signature page
follows]

      

      
        
           

        

        
          - 10
-

          
            

          

        

        
           

        

      

      If the
foregoing accurately reflects the substance of our mutual agreement and
understanding, please so indicate by executing and returning a copy of this
letter agreement.  We look forward to working with you in connection
with this Transaction.

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  	
                                                          Very
      truly yours,

                                                        
	 
      	 
      
	
                                                          ASIA
      SPECIAL SITUATION ACQUISITION CORP.

                                                        
	 
      	 
      
	
                                                          By:

                                                        	
                                                          /s/ Gary T. Hirst

                                                        
	
                                                          Gary
      T. Hirst, President

                                                        
	 
      	 
      
	
                                                          ACCEPTED
      AND AGREED TO

                                                        
	
                                                          this
      22nd
      day of December 2009:

                                                        
	 
      	 
      
	
                                                          NORTHSTAR
      GROUP HOLDINGS, INC.

                                                        
	 
      	 
      
	
                                                          By:

                                                        	
                                                          /s/ John H. Tweedie

                                                        
	
                                                           John
      H. Tweedie, FSA

                                                        
	
                                                           President
      and CEO

                                                        
	 
      	 
      
	
                                                          THE
      ARGUS GROUP

                                                        
	 
      	 
      
	
                                                          By:

                                                        	
                                                          /s/ Gerald Simons

                                                        
	
                                                           The
      Hon. Gerald Simons,

                                                        
	
                                                           President
      and CEO

                                                        
	 
      	 
      
	
                                                          STILLWATER
      CAPITAL PARTNERS, INC.

                                                        
	 
      	 
      
	
                                                          By:

                                                        	
                                                          /s/ Jack Doueck

                                                        
	
                                                           
      Jack Doueck, Principal

                                                        
	 
      	 
      
	
                                                          Subject
      at all times to Section 3(c) above,

                                                        
	
                                                          the
      undersigned confirms the agreement

                                                        
	
                                                          in
      principle set forth in Section 3 above:

                                                        
	 
      	 
      
	
                                                          COMMERZBANK
      AG

                                                        
	 
      	 
      
	
                                                          By:

                                                        	
                                                          /s/ Thomas
      Bistega

                                                        
	
                                                           
      Name: Thomas Bistega

                                                        
	
                                                           
      Title: Head of
CPM

                                                        

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
           

        

        
          - 11
-

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