AlphaStar to Sell Its Realm National and World Trade Subsidiaries to AIM

March 26, 2003

Bermuda’s AlphaStar Insurance Group Limited announced that it has entered into a definitive agreement to sell three subsidiaries, Realm National Insurance Company (RNIC), a New York-domiciled property-casualty insurer; World Trade Services, Inc. (WTS), a managing general agency headquartered in New York; and Stirling Cooke New York Insurance Agency Services, Inc., doing business as World Trade Services, to an affiliate of American Insurance Managers, Inc., of Atlanta, Georgia (AIM).

Alpha Star, formerly Stirling Cooke Brown Holdings Limited, said the purchase price will be based on the GAAP shareholder’s equity of RNIC at December 31, 2002, which will be determined in the near future. It expects it will be approximately $9 million, but also indicated it is “subject to potential adjustment.”

Details of the accord provide for AIM or an affiliate to make two separate down payments in the form of a loan no later than May 2, 2003. “At which time additional purchase consideration in the form of a letter of credit is to be deposited in an escrow account for the benefit of Stirling Cooke North American Holdings Ltd. (“SCNAH”), an AlphaStar subsidiary that owns the equity interest in the subsidiaries being sold,” said the announcement.

It further indicated that “Upon receipt of the loan and the letter of credit (which, together with a loan previously made to AlphaStar by an affiliate of AIM, will total approximately 75% of the total purchase price) and subject to other conditions precedent, including a capital contribution to RNIC by AIM or its affiliate, RNIC will undertake to write a workers compensation insurance program to be produced by AIM. If the required payments are not made, either party may terminate the agreement,” which is also subject to the receipt of regulatory approvals. The remainder of the purchase price is to be paid at a later date.

AlphaStar Chairman, President & CEO Stephen A. Crane stated: “We are pleased to have reached an agreement that offers fair value to AlphaStar and its shareholders for these assets. In light of the Company’s fragile financial health, we will not be able to provide Realm National and World Trade Services with the financial support they will need to grow and achieve significant profitability. As a result, our Board has decided that the best strategy for safeguarding the financial integrity of the Company and preserving value for shareholders is to effect a sale of these operating companies and pursue alternatives for realizing the value of other assets. The AlphaStar Board is also pleased to note that the actions stipulated in the agreement will result in the enhancement of the capital and capacity of RNIC and WTS, and therefore create greater security for RNIC’s policyholders and increased opportunity for the employees of both companies.”

A company spokesman added that AlphaStar has still not received a decision in the U.K. court case between certain London subsidiaries of the Company and Sphere Drake Insurance Holdings Limited. The spokesman added that the outcome of that case could have a significant bearing on the value that can be achieved on behalf of shareholders

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