8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 14, 2005

STRATEGY INTERNATIONAL INSURANCE GROUP, INC.

(Exact Name of Registrant as Specified in Charter)

TEXAS (State or Other Jurisdiction of Incorporation) 333-106637 (Commission File Number) 16-1644353 (IRS Employer Identification Number)

200 Yorkland Blvd., Suite 710, Toronto, Ontario, M2J5C1, Canada

(Address of Principal Executive Offices with Zip Code)

Registrant’s telephone number, including area code: (416) 496-9988

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

qWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

qSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

qPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

qPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 7 — Regulation FD

Item 7.01. Regulation FD Disclosure.

On December 15, 2005, Strategy International Insurance Group, Inc., a Texas corporation (“Strategy”) issued a press release attached as Exhibit 99.6 hereto.

Section 8 — Other Events

Item 8.01. Other Events.

On December 14, 2005, Strategy and Strategy Holding Company Limited, a Barbados company (“Holding”) and a subsidiary of Strategy, concluded the investment transaction outlined in the binding letter agreement entered into on October 25, 2005 (the “Master Investment Agreement”) with Grupo Lakas S.A., a Panamanian corporation (“Grupo Lakas”), Panama Peat S.A., a Panamanian corporation (“Panama Peat”), Changuinola Peat S.A., a Panamanian corporation. Pursuant to the Master Investment Agreement, Grupo Lakas made an investment of U.S.$700,000,000 (the “Investment”) in Holding by issuing to Holding a promissory note, in the original principal amount of U.S.$700,000,000 (the “Note”). The obligations of Grupo Lakas under the Note are secured by bearer peat certificates (the “Peat Certificates”) representing the right to obtain peat, a pre-coal stage organic material used as energy or for horticultural use, and having an estimated value of U.S.$900,000,000. The Peat Certificates were issued by Panama Peat and pledged to Holding by Grupo Lakas. In consideration for making the investment in Holding, Holding has issued to Grupo Lakas Class D preferred shares (the “Preferred Stock”). The Preferred Stock will pay (i) a dividend at an annual rate of 3.43% (U.S.$24,000,000) per annum, which will accrue and be payable on the last day of June and December in each year, commencing on June 30, 2006; and (ii) an additional dividend equal to 12% of the gross premium written by Strategy Insurance Limited (“SIL”), a subsidiary of Holding, above U.S.$200,000,000, provided that such additional dividend will not exceed U.S.$60,000,000 in any year. As additional consideration for the Investment, Strategy has issued a warrant to Grupo Lakas for the purchase of shares of the common stock of Strategy pursuant to the terms of a warrant agreement between Strategy and Grupo Lakas (the “Warrant”). Grupo Lakas may exercise the Warrant at any time after the date on which Strategy shall have effected an increase of its authorized shares of common stock by at least 6,950,000, to provide for an authorized number of shares adequate to issue up to 6,944,009 of voting, fully paid and nonassessed shares of the common stock of Strategy, until 5:00 p.m., E.S.T. on the second anniversary of the date of such increase. Any such shares which Grupo Lakas acquires will be subject to the terms of a registration rights agreement between Strategy and Grupo Lakas.

Section 9 — Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

99.1 Press release of Strategy International Insurance Group, Inc., dated December 15, 2005.

99.2 Registration Rights Agreement, dated December 14, 2005, between Grupo Lakas S.A. and Strategy Holding Company Limited.

99.3 Security Agreement, dated December 14, 2005, between Grupo Lakas S.A. and Strategy Holding Company Limited.

99.4 Warrant, dated December 14, 2005 made by Strategy International Insurance Group, Inc. to Grupo Lakas

99.5 Promissory Note, dated December 14, 2005 issued by Grupo Lakas S.A.

99.6 Master Investment Agreement, dated December 14, 2005, between Strategy International Insurance Group, Inc., Grupo Lakas S.A, Panama Peat S.A., Changuinola Peat S.A., and Strategy Holding Company Limited.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

STRATEGY INTERNATIONAL INSURANCE GROUP, INC.

Date: December 20, 2005               By:  /s/ Stephen Stonhill            

Name:Stephen Stonhill

Title:Chairman of the Board and Chief Executive Officer

EXHIBIT INDEX

Number                  Description

99.1 Press release of Strategy International Insurance Group, Inc., dated December 15, 2005.

99.2 Registration Rights Agreement, dated December 14, 2005, between Grupo Lakas S.A. and Strategy Holding Company Limited.

99.3 Security Agreement, dated December 14, 2005, between Grupo Lakas S.A. and Strategy Holding Company Limited.

99.4 Warrant, dated December 14, 2005 made by Strategy International Insurance Group, Inc. to Grupo Lakas

99.5 Promissory Note, dated December 14, 2005 issued by Grupo Lakas S.A.

99.6 Master Investment Agreement, dated December 14, 2005, between Strategy International Insurance Group, Inc., Grupo Lakas S.A, Panama Peat S.A., Changuinola Peat S.A., and Strategy Holding Company Limited.

EX-99.1

For Immediate Release

December 15, 2005

Strategy International Announces the Completion of $700 Million Investment

Toronto, Ontario — Strategy International Insurance Group, Inc. (OTCBB: SGYI) ("Strategy") announced today that its subsidiary, Strategy Holding Company Limited ("Holding") has finalized the transaction for the sale of $700 million of Preferred Stock of Holding to Grupo Lakas S.A., a Panamanian corporation, in exchange for a $700 million convertible note collateralized assets having an initial value of $900 million. The increase in stockholders’ equity of Holding will be based upon the results of an independent valuation report, currently in progress.

Commenting on the closing Strategy’s CEO, Stephen Stonhill, stated "We are pleased the first step toward new capital infusion to Strategy has been completed. We are looking forward to being able to use our capital base to take advantage of our pipeline of insurance business in early 2006."

Strategy’s senior management has been working diligently toward the recapitalization of its subsidiary Holding pursuant to this transaction and will be postponing the conference call scheduled for today to Monday, January 16, 2005 at 5pm.

About Grupo Lakas

Grupo Lakas is a Panamanian holding company with investments in mineral mining, portuary activities, fuels and power generation.

About Strategy International Insurance Group, Inc.

Strategy International Insurance Group, Inc., (http://www.sgyi.com) a Texas corporation is a publicly traded holding company for a group of financial service companies that are located throughout the world. Strategy Holding Company Limited, a wholly-owned subsidiary is the parent company for a group of insurance related organizations whose operating subsidiaries include Strategy Insurance Limited of Barbados, Strategy Insurance (Canada) Limited and Strategy Underwriting Agency Limited. Strategy Holding Company Limited owns all of the insurance operations of which the key operating insurance company is Strategy Insurance Limited. Strategy Insurance Limited was incorporated in Barbados on December 23, 2003 and was granted a license under the Barbados Exempt Insurance Act on March 25, 2004. Strategy Insurance Limited is Strategy International Insurance Group, Inc.’s key operating insurance company.

Forward-Looking Statement

Statements included in this press release which are not historical in nature, are intended to be, and are hereby identified as "Forward Looking Statements" for purposes of safe harbor provided by Section 21E of the Securities Exchange Act of 1934, as amended. Forward Looking Statements may be identified by words including "anticipate", "await", "envision", "foresee", "aim at", "believe", "intends", "estimates" including without limitation, those relating to the company’s future business prospects, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the Forward Looking Statements. Readers are directed to the company’s filings with the U.S. Securities and Exchange Commission for additional information and a presentation of the risks and uncertainties that may affect the company’s business and results of operations.

EX-99.2

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT, dated as of December 14, 2005 (the “Agreement”), between Strategy International Insurance Group, Inc., a Texas corporation (the “Company”), and Grupo Lakas S.A., a Panamanian corporation (the “Shareholder”).

RECITALS

A.The Shareholder has been issued warrants (the “Warrants”) having a term of two (2) years, to purchase from the Company of up to 6,944,009 shares of the common stock of the Company, par value $0.001 per share (the “Common Stock”).

B.The Company has agreed to grant to the Shareholder certain registration rights with respect to the Common Stock issuable upon the exercise of the Warrants, as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements set forth herein, the parties hereto agree as follows:

1 DEFINITIONS

As used in this Agreement, the following terms shall have the respective meanings set forth below:

1.1“Affiliate” shall have the meaning set forth in Rule 405 under the Securities Act.

1.2“Common Stock” shall have the meaning specified in the Recitals.

1.3“Company” shall have the meaning specified in the Preamble.

1.4“Company Shares” shall have the meaning specified in Section 2.1(c).

1.5“Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended, or any successor law, and regulations and rules issued pursuant to such act or successor law.

1.6“Holder” shall mean a holder of Registrable Securities.

1.7“Maximum Number” shall have the meaning specified in Section 2.1(c).

1.8“Registrable Securities” shall mean all securities beneficially owned by the Shareholder or its permitted assignees under Section 6.4, provided, however, that securities shall cease to be Registrable Securities (a) when a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities have been deposed of pursuant to such registration statement, or (b) when such securities shall have been sold under Rule 144 (or any successor provision) under the Securities Act under circumstances in which any legend borne by such securities shall have ceased to be outstanding.

1.9“Registration Expenses” shall have the meaning specified in Section 3.2.

1

1.10“Securities Act” shall mean the Securities Act of 1933, as amended, or any successor law, and regulations and rules issued pursuant to such act or successor law.

1.11“SEC” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act or the Exchange Act.

1.12“Shareholder” shall have the meaning specified in the Preamble.

1.13“Shelf Registration” shall have the meaning specified in Section 2.1(a).

1.14“Warrant Shares” shall mean shares of Common Stock issuable upon exercise of the Warrants.

2 REGISTRATION RIGHTS

2.1Demand Registration.

(a)At any time following the one year anniversary of the issuance to the Shareholder of Warrant Shares, the Holder of the Registrable Securities shall be entitled to demand that the Company effect the registration under the Securities Act of the applicable Registrable Securities. Such demand registration rights may be exercised with respect to Registrable Securities representing not less than 3,000,000 of the Warrant Shares by giving written notice to the Company. Such written notice shall specify the amount of Registrable Securities to be registered and the intended method of disposition, which may include, without limitation, an underwritten offering or a continuous or delayed offering pursuant to Rule 415 under the Securities Act (a “Shelf Registration”). The Company shall use its reasonable commercial efforts as promptly as practicable to effect the registration under the Securities Act of the number of Registrable Securities specified in any such notice in order to permit the sale of such Registrable Securities by the exercising Holders pursuant to the intended method of distribution specified in such notice.

(b)The Company’s obligations pursuant to Section 2.1(a) hereof, and the right of the Holder to demand the Company file a registration statement pursuant to Section 2.1(a) hereof are subject to the following limitations and conditions:

(i)The Company shall not be required to effect more than one registration in any six month period.

(c)In connection with any demand registration pursuant to this Section 2.1, the Company shall be entitled to register and sell to the public shares of Common Stock to be issued and sold by the Company for its own account (“Company Shares”), provided that if the intended method of distribution is an underwritten offering, such Company Shares shall not cause the number of shares in the proposed offering to exceed the number of shares (the “Maximum Number”) which the managing underwriter advises can be sold in the offering without adversely affecting such offering (including price, timing and distribution).

2

2.2“Piggyback” Registration.

(a)If at any time the Company proposes to register any shares of Common Stock under the Securities Act by registration on Form SB-2, S-3 or any successor or similar general registration form (except registrations on such forms solely for registration of securities offered or sold in connection with an employee benefit plan, stock option plan or dividend reinvestment plan, or a merger, recapitalization, combination or consolidation) for purposes of a sale by the Company for its own account (a “primary offering”), or upon the request or for the account of any holder of its Common Stock, other than in connection with that certain registration of securities in connection with investments made in Strategy Real Estate Investments, Inc. or a demand registration pursuant to Section 2.1 (a “secondary offering”), or for purposes of a combined primary offering and secondary offering, then each such time the Company shall give prompt written notice to the Shareholder of its intention to do so. Such notice shall specify, at a minimum, the number of shares proposed to be registered, the proposed date of filing of such registration statement, any proposed method of distribution of such shares, any proposed managing underwriter or underwriters of such shares and a good faith estimate by the Company of the proposed maximum offering price thereof (if a primary offering). Upon the written request of any Holder, given within twenty (20) days after the receipt by the Shareholder of any such written notice, the Company will use its reasonable commercial efforts to include in such registration statement the number of Registrable Securities specified by the Shareholder in such request for sale pursuant to the intended method of distribution specified in such request; provided, however, that, with respect to any underwritten offering, if the managing underwriter advises the Company and any selling Holder in writing that, in its opinion, the aggregate number of shares proposed to be included in the proposed offering exceeds the Maximum Number, then there shall be included in such offering only such number of Registrable Securities as will not result in an aggregate number of shares to be included in such offering which exceeds the Maximum Number.

(b)The Holders may exercise their piggyback registration rights at any time and from time to time, without limitation on the number of requests. No piggyback registration effected pursuant to this Section 2.2 shall relieve the Company of its obligations to effect demand registrations under Section 2.1.

(c)Any Holder shall have the right to withdraw from any registration under this Section 2.2 by giving written notice to the Company and any other selling shareholder at least ten (10) business days prior to the anticipated effective date of the registration statement.

(d)If, at any time after giving written notice pursuant to this Section 2.2 of its intention to register any shares and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to proceed with the registration process or to delay registration of such shares, the Company shall give written notice of such determination to the Holders. In the case of a determination by the Company not to proceed with the registration process, the Company shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from any obligation of the Company to pay the Registration Expenses in connection therewith).

3

3 REGISTRATION PROCEDURES AND EXPENSES

3.1Registration Procedures. If the Company is required by the provisions of Section 2.1 or 2.2 to use its reasonable commercial efforts to register any Registrable Securities under the Securities Act, the Company shall, as promptly as practicable:

(a)Prepare and file with the SEC a registration statement on any appropriate form under the Securities Act, which form shall be available for the sale of the Registrable Securities in accordance with the intended method or methods of distribution thereof, with respect to such Registrable Securities and use its best commercial efforts to cause such registration statement to become and remain effective.

(b)Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement current and to comply with the provisions of the Securities Act, and any regulations promulgated thereunder, with respect to the sale or disposition of such Registrable Securities, but in no event shall the Company be required to do so for a period of more than nine (9) months following the effective date of the registration statement.

(c)Furnish to the Holders participating in the offering copies (in reasonable quantities) of summary, preliminary, final, amended or supplemented prospectuses, in conformity with the requirements of the Securities Act and any regulations promulgated thereunder, and other documents as reasonably may be required in order to facilitate the disposition of such Registrable Securities, but only while the Company is required under the provisions hereof to keep the registration statement current.

(d)Use its reasonable commercial efforts to register or qualify the Registrable Securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions in the United States as the Holder or the managing underwriter, if any, shall reasonably request, and do any and all other acts and things which may be reasonably necessary to enable each participating Holder or underwriter, if any, to consummate the disposition of the Registrable Securities in such jurisdictions; provided, however, that in no event shall the Company be required to qualify to do business as a foreign corporation in any jurisdiction where it is not so qualified, to execute or file any general consent to service of process under the laws of any jurisdiction, to take any action that would subject it to service of process in suits other than those arising out of the offer and sale of the securities covered by the registration statement, or to subject itself to taxation in any jurisdiction where it has not theretofore done so.

(e)Notify each Holder selling Registrable Securities, at any time when a prospectus relating to any such Registrable Securities covered by such registration statement is required to be delivered under the Securities Act, of the Company’s becoming aware that the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and promptly prepare and furnish to each such Holder selling Registrable Securities and each underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

4

(f)Provide a transfer agent and registrar for all such Registrable Securities covered by such registration statement not later than the effective date of such registration statement.

(g)If the method of disposition is an underwritten offering, obtain an opinion from the Company’s counsel and “cold comfort” letters from the Company’s independent public accountants (including one letter when such registration statement is declared effective and one at the closing of the offering made thereunder) in customary form and covering such matters of the type customarily covered by such opinions and “cold comfort” letters.

3.2Information Concerning the Holders. If requested by the Company, the seller of Registrable Securities as to which any registration is being effected shall furnish to the Company such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing for inclusion in the registration statement in accordance with the rules and regulations of the SEC or in connection with any registration, qualification, compliance or filing for an exemption under state securities laws.

3.3Registration Expenses.

(a)The Company shall pay the Registration Expenses with respect to the demand registrations under Section 2.1.

(b)If registration of Registrable Securities of a Holder is effected pursuant to Section 2.2, the Holders whose Registrable Securities are included in the registration statement will pay the incremental Registration Expenses incurred by the Company in connection with such registration of its Registrable Securities.

(c)“Registration Expenses” shall mean all out-of-pocket expenses incident to the Company’s performance of or compliance with its obligation to register Registrable Securities pursuant to Section 2.1 or 2.2 including, without limitation, (i) all SEC and any NASD registration and filing fees and expenses, (ii) any fees and expenses in connection with the qualification of the shares for offering and sale under the State securities and blue sky laws, including reasonable fees and disbursements of counsel for the underwriters or the placement or sales agent, if any, in connection with such qualifications, (iii) all expenses relating to the preparation, printing, distribution and reproduction of each registration statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the certificates representing the Registrable Securities and all other documents relating hereto, (iv) messenger and delivery expenses, (v) fees and expenses of any escrow agent or custodian, (vi) fees, disbursements and expenses of counsel and independent certified public accountants of the Company (including the expenses of any opinions or “cold comfort” letters required by or incident to such performance and compliance), (vii) the cost of any special or other non-ordinary course of business audit incident to or required by any registration, (viii) any fees and expenses of the Company’s registrar and transfer agent; (ix) any listing fees and (x) if required by the underwriters or the placement or sales agent, reasonable and customary reimbursement of disbursements of the underwriters or the placement or sales agent, including the reasonable fees and disbursements of counsel to the underwriters or the placement or sales agent. Notwithstanding the foregoing, the Holders whose Registrable Securities are included in the registration statement shall pay a prorata share (based on the number of Registrable Securities being sold by the Holders) of all underwriting discounts and commissions and all agency fees and commissions attributable to the sale of the Registrable Securities and all fees and disbursements of any counsel or other advisors or experts retained by the Holders shall not constitute Registration Expenses. The Company shall bear all its own internal expenses, including, without limitation, all salaries and expenses of the Company’s officers and employees performing legal and accounting duties.

5

3.4Lock-Up Undertaking. In order to facilitate any underwritten offering pursuant to the exercise of a demand registration right under Section 2.1, if required by the managing underwriter, Shareholder agrees that it will execute and cause any other Holders to execute an agreement with the underwriters restricting the sale of any Registrable Securities held by each Holder that are not sold pursuant to such offering for such period following the date of commencement of such offering as may be requested by the underwriters.

3.5Indemnification.

(a)Indemnification by the Company. Upon the registration of any Registrable Securities pursuant to Section 2.1 or 2.2 and in consideration of the agreements of the Shareholder contained herein and as an inducement to the Shareholder to enter into this Agreement the Company shall, and hereby agrees to, indemnify and hold harmless each Holder, and each person who participates as an underwriter or a placement or sales agent in any offering or sale of such Registrable Securities, against any losses, claims, damages or liabilities, joint or several, to which any such Holder, underwriter or agent may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, or any preliminary, final or summary prospectus contained therein or furnished by the Company to any such Holder, underwriter or agent, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company shall, and hereby agrees to, reimburse any such Holder, underwriter and agent for any out-of-pocket legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim; provided, however, that the Company shall not be liable to any such person in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, or preliminary, final or summary prospectus, or amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by such person expressly for use therein; and providedfurther, that the Company shall not be liable to any Holder, underwriter or placement or sales agent under the indemnity agreement in this subsection (a) with respect to any preliminary prospectus to the extent that any such loss, claim, damage or liability of such underwriter or agent results from the fact that such underwriter or agent sold Registrable Securities to a person to whom there was not sent or given, at or prior to the written confirmation of such sale, a copy of the related final prospectus if the Company has previously furnished such final prospectus to such underwriter or agent and such prospectus corrects the statement or omission, or alleged statement or omission, out of which such loss, claim, damage or liability arises.

6

(b)Indemnification by the Holders and Agents. The Shareholder, jointly and severally with any Holders requesting the inclusion of Registrable Securities in any registration statement, and from each underwriter named in any such underwriting agreement, severally and not jointly as between such underwriters and the Holders, hereby covenants and agrees to (i) indemnify and hold harmless the Company, and all other shareholders, if any, selling under the same registration statement, against any losses, claims, damages or liabilities to which the Company or such other shareholders may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in such registration statement, or any preliminary final or summary prospectus contained therein or furnished by the Company to the Holders, underwriter or agent, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by the Holders or underwriter expressly for use therein, and (ii) reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim.

(c)Notices of Claims, Etc. Promptly after receipt by an indemnified party under subsection 3.5(a) or (b) above of written notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party pursuant to the indemnification provisions of or contemplated by this Section 3.5, notify such indemnifying party in writing of the commencement of such action; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party other than under the indemnification provisions of or contemplated by Section 3.5(a) or 3.5(b) hereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who may be counsel to the indemnifying party unless representation of both parties by the same counsel would be inappropriate due to actual or potential conflicts of interest between them), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. So long as an indemnifying party is complying with its obligations under this Section 3.5, such indemnifying party shall not be liable for settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld.

7

(d)Contribution. Each party hereto agrees that, if for any reason the indemnification provisions contemplated by Section 3.5(a) or Section 3.5(b) hereof are unavailable to or insufficient to hold harmless as indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 3.5(d) were determined by pro rata allocation (even if the Holders or any underwriters or agents or all of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 3.5(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, or liabilities (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations in this Section 3.5(d) to contribute shall be joint and several and, as between the Holders and any underwriters, their obligations in this Section 3.5(d) to contribute shall be several in proportion to the number or amount of Registrable Securities registered or underwritten, as the case may be, by them and not joint.

(e)The obligations of the Company under this Section 3.5 shall be in addition to any liability which the Company may otherwise have and shall extend upon the same terms and conditions, to each officer, director and partner of any Holder, underwriter or agent and each person, if any, who controls any Holder, underwriter or agent within the meaning of the Securities Act; and the obligations of the Holders and any underwriters contemplated by this Section 3.5 shall be in addition to any liability which the Holders or underwriter may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company (including any person who, with his consent, is named in any registration statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Securities Act.

(f)The indemnification of underwriters provided for in this Section 3.5 shall be on such other terms and conditions as are at the time customary for a public offering in the United States, and reasonably required by such underwriters, in which event the indemnification of the Holders selling Registrable Securities in such public offering shall at their request be modified to conform to such terms and conditions.

8

3.6Exchange Act Filings; Rule 144; Rule 144A.

(a)The Company covenants to and with the Shareholder that to the extent it shall be required to do so under the Exchange Act, the Company shall timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including, but not limited to, the reports under Section 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the SEC under the Securities Act) and the rules and regulations adopted by the SEC thereunder, to enable the Holders to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. Upon the request of the Shareholder, the Company shall deliver to such Shareholder a written statement as to whether it has complied with such requirements.

(b)If at any time the Company is not subject to Section 13 or 15(d) of the Exchange Act and is not exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, the Company agrees, upon the request of any Holder seeking to transfer securities in conformity with Rule 144A under the Securities Act to furnish to such Holder or prospective purchasers of the securities from such Holder the information required by Rule 144A(d)(4)(i) under the Securities Act in the manner and at the times contemplated by such Rule.

4 EFFECTIVE DATE AND TERMINATION

4.1This Agreement is effective on and as of the date first set forth above.

4.2The registration rights granted hereunder of any Holder shall terminate if (a) such Holder (together with its Affiliates) holds less than one (1%) percent of the outstanding Common Stock and (b) all Registrable Securities held by and issuable to such Holder (and its Affiliates, partners and former partners, if any) may be sold under Rule 144 during any ninety (90) day period or under Rule 144(k).

5 MISCELLANEOUS

5.1Notices. Each notice, demand or other communication given or made under this Agreement shall be in writing and delivered or sent to the relevant party at its address or facsimile number set forth below (or such other address or facsimile number as the addressee has by five (5) days’ prior written notice specified to the other parties). Any notice, demand or other communication so addressed to the relevant party shall be deemed to have been delivered (x) if given or made by letter, when actually delivered to the relevant address; or (y) if given or made by facsimile, when dispatched with confirmed report of transmission.

(a)if to the Company to: Strategy International Insurance Group, Inc., [200 Yorkland Blvd., Suite 710, Toronto, Ontario, Canada M2J 5C1], Attn: Sean Maniaci, Esq., facsimile number: 416-391-4985, with a copy to Baker & McKenzie LLP, 1114 Avenue of the Americas, New York, New York, Attn: Martin Eric Weisberg, Esq., facsimile number: (212) 310-3786.

9

(b)if to the Holder, to Grupo Lakas S.A., Av. De la Hortensa/497, Piso 5 San Borja, Lina, Peru, Attn: M. Otto Demetrio Lakas R.; with a copy to [ ]

5.2No Waivers. No failure or delay by any party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of the same preclude any further exercise thereof or the exercise of any other right, power or remedy. Without limiting the foregoing, no waiver by any party of any breach of any provision hereof shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof. If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect, the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.

5.3Modifications and Amendments. At any time prior to the termination of this Agreement, the parties hereto may, by written agreement, modify or amend the provisions of this Agreement or extend the time for the performance of any of the obligations or other acts of the other parties hereto.

5.4Assignment. The Shareholder shall not be entitled to assign its rights under this Agreement, except to any Affiliate to whom such Shareholder transfers Registrable Securities, so long as such transferee enters into an agreement to be bound by the terms of this Agreement. The Shareholder’s obligations hereunder may not be assigned and no assignment of rights pursuant to this Agreement will limit or affect the assignor’s obligations hereunder.

5.5Entire Agreement. This Agreement and any agreements, documents and instruments to be executed and delivered pursuant hereto are intended to embody the final, complete and exclusive agreement among the parties with respect to the subject matter of this Agreement, and are intended to supersede all prior agreements, understandings and representations written or oral, with respect thereto. No variations of this Agreement shall be effective unless made in writing.

5.6Further Assurances. From time to time, the parties hereto shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions as may be reasonably necessary or desirable to give effect to the provisions of this Agreement.

5.7Severability. If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction., the legality, validity and enforceability of such provision under the law of any other jurisdiction, and of the remaining provisions of this Agreement, shall not be affected or impaired thereby.

5.8Governing Law and Jurisdiction.

(a)This Agreement shall be governed by and construed in accordance with the laws of New York without regard to principles of conflicts of law which would result in the application of the laws of another jurisdiction.

10

(b)Each party hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any of the New York state or federal courts, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in such courts has been brought in an inconvenient forum. Each party further agrees that final judgment against it in any such action or proceeding shall be final and conclusive and may be enforced in any other jurisdiction by suit on the judgment, a verified, certified, exemplified or otherwise duly authenticated copy of which shall be conclusive evidence of the fact and the amount of its indebtedness.

5.9Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.

[The Remainder Of This Page Intentionally Left Blank]

11

IN WITNESS WHEREOF this Agreement has been executed on the day and year first above written.

STRATEGY INTERNATIONAL INSURANCE GROUP, INC.

By: /s/ Louis Lettieri

Name: Louis Lettieri

Title: Chief Financial Officer

GRUPO LAKAS S.A.

By: /s/ Otto Demetrio Lakas R.

Name: Otto Demetrio Lakas R.

Title: President

12

EX-99.3

SECURITY AGREEMENT

SECURITY AGREEMENT, dated as of December 14, 2005 (as the same may be amended, restated, supplemented or otherwise modified from time to time, this “Agreement”),] by and among Grupo Lakas S.A., a Panamanian corporation (the “Grantor”), Panama Peat S.A., a Panamanian corporation (“PP”), Changuinola S.A., a Panamanian corporation (“Changuinola” and together with PP, the (“Issuers”), and Strategy Holdings Company, Ltd, a Barbados company (the “Company” and the same shall include any assignee of the Note and this Agreement), in connection with that certain Master Investment Agreement, dated as of December 14, 2005, among the Grantor, the Issuers and the Company (the “Investment Agreement”) and that certain Promissory Note of even date herewith, between the Grantor and the Company (as amended, restated, supplemented or otherwise modified from time to time, the “Note”).

R E C I T A L S

A.The Company, the Issuers and the Grantor are parties to that certain Master Investment Agreement, dated as of December 14, 2005 (the “Master Investment Agreement.) Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Master Investment Agreement. Pursuant to the Master Investment Agreement, and simultaneously with the execution and delivery of this Agreement, the Grantor shall issue the Note in favor of the Company, in exchange for the Company’s issuance of preferred stock to the Grantor.

B.In order to secure the prompt and complete payment, observance and performance of (i) all of the Grantor’s obligations pursuant to the Investment Agreement and the Note (the “Obligations”), and (ii) the Grantor’s obligations and liabilities hereunder and in connection herewith (all such Obligations and such obligations and liabilities hereunder being hereinafter referred to collectively as the “Liabilities”), and to permit the Company to exercise the Conversion Right, as more fully discussed herein, the Company requires, as a precondition to the acceptance of the Note and the issuance of the preferred stock, that the Grantor and the Issuers execute and deliver this Agreement, and to deliver to the Company the Peat Certificates.

NOW, THEREFORE, for and in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

Section 1.Defined Terms; Construction.

(A)Unless otherwise defined herein or in the Master Investment Agreement, all terms defined in Article 8 and Article 9 of the Uniform Commercial Code are used herein as defined therein.

(B)The words “hereby,”  “hereof,”  “herein” and “hereunder” and words of like import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Section references herein are to this Agreement unless otherwise specified.

SECURITY AGREEMENT

-1-

(C) All terms defined in this Agreement in the singular shall have comparable meanings when used in the plural, and viceversa, unless otherwise specified.

(D)The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

Section 2.Grant of Security Interest; Conversion Right. (a)To secure the prompt and complete payment, observance and performance of the Liabilities, the Grantor hereby assigns and pledges to the Company, and hereby grants to the Company a security interest in all of the Grantor’s right, title and interest, whether now owned or existing or hereafter arising or acquired and wheresoever located, in and to the following (collectively, the “Collateral”): each of the bearer certificates for peat issued by the Issuers and listed on Schedule A hereto (the “Initial Peat Certificates”) together with any additional certificates for peat from time to time delivered to or on behalf of the Company in accordance with the terms of the Master Investment Agreement (“Additional Peat Certificates”), and together with the Initial Peat Certificates, collectively, (the “Peat Certificates”) all substitutions therefor, and replacements, products thereof and any other property receivable or received from or upon the sale, lease, license, collection, use, exchange or other disposition, whether voluntary or involuntary, of any of the foregoing, including “proceeds” as defined in the Uniform Commercial Code, any and all payments (in any form whatsoever) made or due and payable to the Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority or any individual, corporation, general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or governmental authority (hereinafter each a “Person”), acting under color of governmental authority, any and all other amounts from time to time paid or payable under or in connection with any of the foregoing or for or on account of any damage or injury to or conversion of any of the foregoing by any Person, any and all tangible or intangible property received upon the sale or disposition of the foregoing and all proceeds of proceeds.

(b)The parties hereto hereby acknowledge and agree that, pursuant to the Master Investment Agreement and the Note, at any time and from time to time the Company (and its assigns) shall have the right, in the sole discretion thereof, to convert (the “Conversion Right”) the Peat Certificates and/or the underlying peat constituting collateral for the Note to cash proceeds, such cash proceeds to be applied as a deemed prepayment of the outstanding principal balance of, and/or accrued interest on, the Note all upon the terms (including, without limitation, determination of the Peat Reduction Amount) set forth in the Master Investment Agreement.

Section 3.Grantor and Issuers Remain Liable.  Anything herein to the contrary notwithstanding, (A) the Grantor and the Issuers shall remain solely liable under the contracts and agreements included in the Collateral to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement and the Note had not been executed, (B) the exercise by the Company of any of its rights hereunder or under the Note shall not release the Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral and (C) the Company shall not have any responsibility, obligation or liability under the contracts and agreements included in the Collateral by reason of this Agreement or the Note, nor shall the Company be required or obligated, in any manner, to (i) perform or fulfill any of the obligations or duties of the Grantor and/or the Issuers thereunder, (ii) make any payment, or make any inquiry as to the nature or sufficiency of any payment received by the Grantor and/or the Issuers or the sufficiency of any performance by any party under any such contract or agreement or (iii) present or file any claim, or take any action to collect or enforce any claim for payment assigned hereunder.

SECURITY AGREEMENT

-2-

Section 4.Representations and Warranties of the Grantor.  The Grantor represents and warrants, as of the date of this Agreement, and as of each date on which representation and warranties under the Note shall be made until termination of this Agreement pursuant to Section 12:

(A)The exact legal name, jurisdiction of incorporation, type of entity and organizational identification number for the Grantor is set forth on Schedule 1 hereto. The chief place of business and chief executive office of the Grantor is located at the address of the Grantor designated as such on Schedule 1. It has full corporate power and authority to execute, deliver and perform this Agreement. No authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required either (i) for the pledge of the Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by the Grantor or (ii) for the exercise by the Company of any rights provided for in this Agreement or the remedies in respect of the Collateral pursuant to this Agreement.

(B)The Grantor is the sole legal and beneficial owner of the Collateral, free and clear of all liens. The Grantor currently conducts business under its legal name. The Grantor has not used any trade names or fictitious names in the past five years. Upon delivery to the Company of the Peat Certificates, the Company holds a valid and perfected security interest or first priority therein subject to no liens or encumbrances.

(C)All factual information contained on each of the Peat Certificates is true and correct in all respects, and each signature on each Peat Certificate is genuine. Each Peat Certificate is an original and is true and complete, and each represents the right to obtain, without that amount of peat that the same purports to so represent. The aggregate value of the Initial Peat Certificates is and shall at all times be not less than the Required Value, determined in accordance with the Valuation Method.

(D)This Agreement creates in favor of the Company a legal, a valid and enforceable equitable interest or perfected first priority security interest in and lien on the Collateral, Securing the Obligations superior to and prior to the rights of all third Persons, and subject to no other liens. All actions to perfect the security interests in the Collateral have been taken (including any action to be taken under the laws of Panama). The Company is the legal and beneficial owner of the Collateral free and clear of any lien, except for the liens and security interests created hereunder. This Agreement also permits the Company to exercise the Conversion Right, upon the terms set forth in the Master Investment Agreement, notwithstanding the creation of such lien in favor of the Company.

SECURITY AGREEMENT

-3-

(E)Perfection and Maintenance of Security Interests and Liens; Obligation to Maintain Value of the Collateral. Each of the Issuers and the Grantor agrees that until termination of this Agreement pursuant to Section 12, except to the extent the Company (or assigns) have exercised the Conversion Right, the security interests granted hereunder, and liens on and against, the Collateral shall continue in full force and effect. The Grantor and each Issuer further covenants and agrees to ensure that the aggregate value of the Collateral, the Required Value, determined in accordance with the Valuation Method.

Section 5.The Grantor and each Issuer shall perform any and all steps reasonably requested by the Company to ensure (x) the attachment, perfection and priority of, and to maintain and protect, the Company’s security interests in and liens on and against the Collateral granted or purported to be granted hereby or to enable the Company to exercise its rights and remedies hereunder with respect to the Collateral, and to ensure that the Required Value , and (y) that the aggregate value of the Collateral shall be at least the Required Value, including, without limitation:

(A)executing, filing and authorizing the Company to file any financing or continuation statements, or amendments thereof, in form and substance reasonably satisfactory to the Company;

(B)delivering to the Company the Peat Certificates as well as all other certificates, notes, or other instruments representing or evidencing the Collateral, which Peat Certificates and other certificates, notes and other instruments have been duly endorsed in blank, including, but not limited to, note powers, all in form and substance satisfactory to the Company;

(C)at the reasonable request of the Company, appearing in and defending any action or proceeding which may affect adversely the Grantor’s title to, or the security interest of the Company in, the Collateral;

(D)executing and delivering all further instruments and documents, and taking all further action, as the Company may reasonably request; and

(E)at any time when the aggregate value of the Collateral determined in accordance with the Valuation Method, shall be less than the Required Value (such amount, the “Shortfall”) delivering to the Company (or its assignee, as applicable) additional Peat Certificates, all of which shall constitute Collateral hereunder, in an aggregate amount of not less than the Shortfall.

Section 6.Financing Statements. The Grantor hereby irrevocably authorizes the Company to file one or more financing or continuation statements and amendments thereto, and any other instruments and documents as may be necessary or desirable, disclosing the security interest granted to the Company under this Agreement, without the Grantor’s signature appearing thereon, and the Company agrees to notify the Grantor when such a filing has been made. The Grantor agrees that a carbon, photographic, photostatic, or other reproduction of this Agreement or of a financing statement is sufficient as a financing statement. The Grantor agrees that such authorization includes a ratification and authorization with respect to any initial financing statements filed prior to the date hereof.

SECURITY AGREEMENT

-4-

Section 7.General Covenants. Each of the Issuers and the Grantor covenants and agrees with the Company that from and after the date of this Agreement and until termination of this Agreement pursuant to Section 12, :

(i) the Grantor shall not:

(a) sell or otherwise dispose of, or grant any option with respect to, any of the Collateral without the prior written consent of the Company, or

(b) sell, encumber, transfer or otherwise dispose of or hypothecate the Collateral or any portion thereof nor create or permit to exist any lien upon or with respect to any of the Collateral, except for the security interest under this Agreement, and will defend the Collateral against, and take such other action as is necessary to remove, any lien or encumbrance on the Collateral; and

(ii) the Grantor and the Issuers shall:

(a) not enter into any agreement or understanding that purports to or may restrict or inhibit the Company’s rights or remedies hereunder, including, without limitation, the Company’s right to sell or otherwise dispose of the Collateral;

(b) not use or permit any Collateral to be used unlawfully or in violation of any provision of this Agreement, the Note, any requirement of any applicable law or any policy of insurance covering the Collateral; and

(c) if any of the Collateral, or any amount payable under or in connection with any of the Collateral, shall be or become evidenced by any chattel paper, stock certificate, promissory note, stock certificate or other instrument which has not already been delivered to the Company, the Grantor and/or the Issuer(s) as applicable, shall cause such chattel paper, note, stock certificate, or other instrument to be immediately pledged and delivered to the Company, duly endorsed in blank and/or attaching undated stock powers executed in blank, in a manner satisfactory to the Company.

Section 8.Company Appointed Attorney-in-Fact. The Grantor hereby irrevocably appoints the Company as the Grantor’s attorney-in-fact, coupled with an interest, with full authority in the place and stead of the Grantor and in the name of the Grantor or otherwise, from time to time in the Company’s discretion, to take any action and to execute any instrument which the Company may deem necessary or advisable to accomplish the purposes of this Agreement; provided, that only following the occurrence and during the continuance of an Event of Default may the Company sell, transfer, assign or otherwise deal in or with the Collateral or any part thereof.

The Grantor agrees that neither the Company, nor any of its designees or attorneys-in-fact, will be liable for any act of commission or omission, or for any error of judgment or mistake of fact or law with respect to the exercise of the power of attorney granted under this Section 7, other than as a result of its or their gross negligence or willful misconduct.

SECURITY AGREEMENT

-5-

Section 9.Company’s Duties. The powers conferred on the Company hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession (subject to the right to exercise the Conversion Right), the Company shall not have any duty as to the Collateral. The Company shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Company accords its own property, it being understood that the Company shall be under no obligation to take any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral, but may do so at its option, and all reasonable expenses incurred in connection therewith shall be for the sole account of the Grantor and shall be added to the Liabilities. The Grantor bears all risk of loss or damage of any of the Collateral, except to the extent such loss or damage shall arise solely from the gross negligence or willful misconduct of the Company.

Section 10.Events of Default; Remedies.

(A)Events of Default: Each of the following shall constitute an "Event of Default" hereunder:

(a) The occurrence of an Event of Default under and as defined in the Master Investment Agreement and/or the Note; or

(b) The failure by Grantor or any Issuer to perform or observe any covenant or agreement herein which is not cured within ten (10) Business Days after notice thereof to the Grantor or such Issuer; or

(c) Any representation or warranty of Grantor or any Issuer contained herein or in any certificate, report, opinion or notice delivered or to be delivered by Grantor or the Issuers pursuant hereto shall be or become incorrect or misleading in any material respect.

(B)In addition to all other rights and remedies granted to it under this Agreement, the Note, and under any other instrument or agreement securing, evidencing or relating to any of the Liabilities, if any Event of Default shall have occurred and be continuing, the Company may exercise all rights and remedies of a secured party under the Uniform Commercial Code (whether or not the Uniform Commercial Code applies to the affected Collateral). Without limiting the generality of the foregoing, each of the Grantor and the Issuers expressly agrees that in any such event the Company, without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon the Grantor or any other Person (all and each of which demands, advertisements and notices are hereby expressly waived to the maximum extent permitted by the Uniform Commercial Code and other applicable law), may realize upon the Collateral, or any part thereof, and may forthwith sell, lease, license, assign, give an option or options to purchase, or sell or otherwise dispose of and deliver said Collateral (or contract to do so), or any part thereof, in one or more parcels at a public or private sale or sales, at any exchange at such prices as it may deem acceptable, for cash or on credit or for future delivery without assumption of any credit risk, and may transfer any of the Collateral into its own name or that of its nominee and receive the proceeds therefrom and hold the same as security for the Liabilities or apply to same thereto.

(C)The Company shall apply the net proceeds of any realization or sale to the Liabilities, and only after so paying over such net proceeds, and after the payment by the Company of any other amount required by any provision of law, need the Company account for the surplus, if any, to the Grantor. To the maximum extent permitted by applicable law, the Grantor and the Issuers waive all claims, damages, and demands against the Company arising out of the sale of the Collateral except such as arise solely out of the gross negligence or willful misconduct of the Company as finally determined by a court of competent jurisdiction. The Grantor agrees that ten (10) days prior notice by the Company of the time and place of any public sale or of the time after which a private sale may take place is reasonable notification of such matters. The Grantor shall remain liable for any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay all Liabilities, including any attorneys’ fees and other expenses incurred by the Company to collect such deficiency.

SECURITY AGREEMENT

-6-

(D)Except as otherwise specifically provided herein, the Grantor and the Issuers hereby waive presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Agreement or the Collateral.

(E)The Company shall not be required to make any demand upon, or pursue or exhaust any of their rights or remedies against, the Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Liabilities or to pursue or exhaust any of their rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof. To the extent it may lawfully do so, the Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Company, any valuation, stay, appraisement, extension, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Agreement, or otherwise.

(F)The Company may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral, and the Company’s compliance therewith will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

(G)Upon the exercise by the Company of any power, right, privilege, or remedy pursuant to this Agreement which requires any consent, approval, registration, qualification, or authorization of any Governmental Authority or any third party, the Grantor and each Issuer agrees to execute and deliver, or will cause the execution and delivery of, all applications, certificates, instruments, assignments, and other documents and papers that the Company or any purchaser of the Collateral may be required to obtain for such consent, approval, registration, qualification, or authorization.

(H)The rights and remedies provided under this Agreement are cumulative and may be exercised singly or concurrently and are not exclusive of any rights and remedies provided by applicable law or equity.

Section 11.Exercise of Remedies. In connection with the exercise of its remedies pursuant to Section 9, the Company may, but shall have no obligation to: (A) exchange, enforce, waive or release any portion of the Collateral and any other security for the Liabilities; (B) subject to the Note, apply such Collateral or security and direct the order or manner of sale thereof as the Company may, from time to time, determine; and (C) settle, compromise, collect or otherwise liquidate any such Collateral or security in any manner following the occurrence of an Event of Default, without affecting or impairing the Company’s right to take any other further action with respect to any Collateral or security or any part thereof. The Grantor waives any right it may have to require the Company to pursue any third person for any of the Liabilities.

SECURITY AGREEMENT

-7-

Section 12.Injunctive Relief. The Grantor recognizes that in the event the Grantor or any Issuer fails to perform, observe or discharge any of its obligations or liabilities under this Agreement, any remedy of law may prove to be inadequate relief to the Company; therefore, the Grantor agrees that the Company shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

Section 13. Termination of this Security Agreement; Release of Collateral.

(A)The security interest granted by the Grantor under this Agreement shall terminate against all the Collateral upon irrevocable payment in full of the outstanding principal balance of, and all accrued and unpaid interest on, the Note. Upon such termination (other than as a result of the sale of the Collateral) and at the written request of the Grantor or its successors or assigns, and at the cost and expense of the Grantor or its successors or assigns, the Company shall execute in a timely manner such instruments, documents or agreements as are reasonably necessary or reasonably desirable to terminate the Company’s security interest in the Collateral, subject to any disposition made by the Company pursuant to the Agreement.

(B)The Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement without the prior written consent of the Company and agrees that it will not do so without the prior written consent of the Company, subject to the Grantor’s rights under Section 9-509(d)(2) of the Uniform Commercial Code.

Section 14. Successors and Assigns. This Agreement shall be binding upon the Grantor and its successors, and upon any assign(s) of the Company in accordance with (and the parties hereto hereby confirm that the Company has the right to assign) the Note, and shall so inure to the benefit of the Company and its respective successors and permitted assigns. Nothing set forth herein or in the Note is intended or shall be construed to give any other Person any right, remedy or claim under, to or in respect of this Agreement, the Note or any Collateral. The Grantor’s successors shall include, without limitation, a receiver, trustee or debtor-in-possession of or for the Grantor.

Section 15. APPLICABLE LAW. THIS AGREEMENT SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK .WITHOUT REGARD TO CONFLICTS OF LAWS AND PROVISIONS WHICH WOULD RESULT IN THE APPLICATION OF THE SUBSTANTIVE LAWS OF ANOTHER JURISDICTION.

Section 16. Consent to Jurisdiction and Service of Process. The Grantor and each Issuer agrees that the terms of the Investment Agreement with respect to consent to jurisdiction and service of process shall apply equally to this Agreement.

SECURITY AGREEMENT

-8-

Section 17. WAIVER OF JURY TRIAL. EACH OF THE GRANTOR, THE ISSUERS, AND THE COMPANY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN THE COMPANY, THE ISSUERS, AND THE GRANTOR ARISING OUT OF, OR RELATED TO, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. THE GRANTOR, THE ISSUERS OR THE COMPANY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 18. Waiver of Bond. The Grantor and the Issuers waive the posting of any bond otherwise required of the Company in connection with any judicial process or proceeding to realize on the Collateral or any other security for the Liabilities, to enforce any judgment or other court order entered in favor of the Company, or to enforce by specific performance, temporary restraining order, or preliminary or permanent injunction, this Agreement or any other agreement or document between the Company, the Issuers and the Grantor.

Section 19. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but, if any provision of this Agreement shall be held to be prohibited or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

Section 20. Notices. All notices and other communications required or desired to be served, given or delivered hereunder shall be in writing and shall be served, given or delivered as provided in the Note.

Section 21. Amendments, Waivers and Consents. None of the terms or provisions of this Agreement may be waived, altered, modified or amended, and no consent to any departure by the Grantor or any Issuer herefrom shall be effective, except by or pursuant to an instrument in writing which is duly executed by the Grantor, the Issuers and the Company. Any such waiver shall be valid only to the extent set forth therein. A waiver by the Company of any right or remedy under this Agreement on any one occasion shall not be construed as a waiver of any right or remedy which the Company would otherwise have on any future occasion. No failure to exercise or delay in exercising any right, power or privilege under this Agreement on the part of the Company shall operate as a waiver thereof; and no single or partial exercise of any right, power or privilege under this Agreement shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

Section 22. Section Titles. The section titles herein are for convenience of reference only, and shall not affect in any way the interpretation of any of the provisions hereof.

Section 23. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

SECURITY AGREEMENT

-9-

Section 24.Entire Agreement. This Agreement represents the final agreement of the Grantor with respect to the matters contained herein and may not be contradicted by evidence of prior or contemporaneous agreements, or subsequent oral agreements, between the Grantor and the Company.

SECURITY AGREEMENT

-10-

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.

Grupo Lakas S.A. /s/ Otto Demetrio Lakas R. By: Otto Demetrio Lakas R. Its: President	Strategy Holding Company Limited /s/ Louis Lettieri By: Louis Lettieri Its: Chief Financial Officer
Peat Panama S.A. /s/ Alfred Sklar By: Alfred Sklar Its: President	Changuinola S.A. /s/ Alfred Sklar By: Alfred Sklar Its: President

SECURITY AGREEMENT

SCHEDULE 1

TO

SECURITY AGREEMENT

Legal Name, Jurisdiction of Organization, Organization Type,

Organizational Identification Numbers

  Legal Name   Jurisdiction of Organization; Type   Organizational Identification Number

Grantor Locations

CompanyChief Executive OfficeOther Offices:

Grantor

Changuinola

PP

Exhibit A

Peat Certificates

Certificate # Issuer Peat Evidenced Thereby Certificate Value Date of Delivery of Peat Date of Issuance

EX-99.4

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER SECURITIES LAWS, STATE OR FEDERAL. THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO STRATEGY INTERNATIONAL INSURANCE GROUP, INC. (THE “COMPANY”) IN FORM, SCOPE AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

STRATEGY INTERNATIONAL INSURANCE GROUP, INC.

COMMON STOCK PURCHASE WARRANT

Issue Date: December 14, 2005

STRATEGY INTERNATIONAL INSURANCE GROUP, INC., a corporation organized under the laws of the State of Texas (the “Company”), hereby certifies that, for value received, Grupo Lakas S.A., a Panamanian corporation, or its assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time after the date (the “Increase Date”) on which the Company shall have effected an increase of its authorized shares of common stock by at least 6,950,000, to provide for an authorized number of shares adequate to issue the Warrant Shares (defined below), until 5:00 p.m., E.S.T on the second anniversary of the Increase Date (the “Expiration Date”), subject to the limitations specified herein, up to 6,944,009 (the “Warrant Shares”) of voting, fully paid and nonassessed shares of the common stock of the Company, par value $0.001 per share (the “Common Stock”) at a per share purchase price of $1.75. The $1.75 purchase price per share, as adjusted from time to time as herein provided, is referred to herein as the “Purchase Price.” The number of shares of Common Stock issuable upon exercise of the Warrant and the Purchase Price are subject to adjustment as provided herein.

1. Definition.

As used herein the following terms, unless the context otherwise expressly requires, have the following respective meanings:

(a)The term “Affiliate” of any Person (the “First Person”) shall mean any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the First Person.

(b)The term “Business Day” shall mean any day excluding Saturday, Sunday, and any day which is a legal holiday under the laws of New York, or is a day on which banking institutions located in such state are required or authorized by law or other governmental action to close.

(c)The term “Common Stock” includes (a) the Company's Common Stock, $.001 par value per share, and (b) any other securities into which or for which any of the securities described in (a) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

(d)The term “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other Person (corporate or otherwise) which the Holder of this Warrant at any time shall he entitled to receive, or shall have received, on the exercise of this Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 hereof or otherwise.

(e)The term “Person” shall mean any natural person, corporation, general partnership, limited partnership, limited liability company, sole proprietorship, trust, union, association, enterprise, authority or other form of business organization.

2.Exercise of Warrant.

2.1Number of Shares Issuable upon Exercise. From and after the Increase Date through and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of this Warrant in whole, in accordance with the terms of Section 2.2 hereof, or in part, in accordance with Section 2.3 hereof, shares of Common Stock of the Company, subject to adjustment pursuant to Section 4 hereof.

2.2Full Exercise. This Warrant may be exercised in full by the Holder hereof by delivery of an original or facsimile copy of the form of warrant exercise attached hereto as Exhibit A hereto (the “Exercise Form”) duly executed by such Holder and surrender of the original Warrant within three (3) days of exercise, to the Company at its principal office or at the office of its Warrant Agent (as provided hereinafter, if applicable), accompanied by payment, in cash, wire transfer or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock for which this Warrant is then exercisable by the Purchase Price then in effect.

2.3Partial Exercise. This Warrant may be exercised in part (but not for a fractional share) by surrender of this Warrant in the manner and at the place provided in Section 2.2 hereof, except that the amount payable by the Holder on such partial exercise shall be the amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the Holder in the Exercise Form by (b) the Purchase Price then in effect. On any such partial exercise, the Company, at its expense, will issue and deliver to or upon the order of the Holder hereof a new warrant of like tenor, in the name of the Holder or as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, the whole number of shares of Common Stock for which this Warrant may still be exercised.

2.4Fair Market Value. Fair Market Value of a share of Common Stock as of a particular date (the “Determination Date”) shall mean:

(a)If the Company’s Common Stock is traded on an exchange or is quoted on the National Association of Securities Dealers, Inc. Automated Quotation (“NASDAQ”), National Market System, the NASDAQ SmallCap Market or the American Stock Exchange, LLC, then, the closing or last sale price, respectively, reported for the last business day immediately preceding the Determination Date;

2

(b)If the Company's Common Stock is not traded on an exchange or on the NASDAQ National Market System, the NASDAQ SmallCap Market or the American Stock Exchange, inc., but is traded in the over-the-counter market, then the average of the closing bid and ask prices reported for the last business day immediately preceding the Determination Date;

(c)Except as provided in Section 2.4(d), if the Company’s Common Stock is not publicly traded, then as determined by the independent members of the Company’s Board of Directors; provided that if the Holder objects to the determination made by the independent members of the Company’s Board of Directors, the “Fair Market Value” shall be determined, by arbitration in accordance with the rules then standing of the American Arbitration Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to pass on the matter to be decided; or

(d)If the Determination Date is the date of a liquidation, dissolution or winding up of the Company, or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company's charter, then all amounts to be payable per share to holders of the Common Stock pursuant to the Company’s certificate of incorporation in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the Company’s certificate of incorporation, assuming for the purposes of this Section 2.4(d) that all of the shares of Common Stock then issuable upon exercise of this Warrant are outstanding at the Determination Date.

2.5Company Acknowledgment. The Company will, at the time of the exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to this Holder any rights to which the Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to the Holder any such rights.

2.6Trustee Appointment. In the event that a bank or trust company shall have been appointed as trustee for the Holder of this Warrant and any other securities of the Company pursuant to Section 3.2 hereof, such bank or trust company shall have all the powers and duties of a warrant agent and shall accept, in its own name for the account of the Company or such successor person as may be entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may be, upon the exercise of this Warrant.

2.7Delivery of Stock Certificates, etc. upon Exercise. The Company agrees that the shares of Common Stock issuable and purchased upon exercise of this Warrant shall be deemed to be issued to the Holder hereof as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as provided for herein. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) Business Days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof, or as the Holder (upon payment by the Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which the Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which the Holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market Value of one full share of Common Stock, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled to upon the exercise of this Warrant.

3

3.Adjustment for Reorganization, Consolidation, Merger, etc.

3.1Reorganization, Consolidation, Merger, etc. In case at any time or from time to time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other Person or (c) transfer all or substantially all of its properties or assets to any other Person under any plan or arrangement contemplating the dissolution of the Company, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Warrant, on the exercise hereof, at any time after the consummation of such reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which the Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if such Holder had so exercised this Warrant, immediately prior thereto.

3.2Dissolution. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense, deliver or cause to be delivered the stock and other securities and property (including cash, where applicable) receivable by the Holder of this Warrant after the effective date of such dissolution pursuant to this Section 3 to a bank or trust company (a “Trustee”) having its principal office in New York, New York, as trustee for the Holder of the Warrants.

3.3Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the exercise off this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any Other Securities, including, in the case of any such transfer, the Person acquiring all or substantially all of the properties or assets of the Company, whether or not such Person shall have expressly assumed the terms of this Warrant. In the event this Warrant does not continue in full force and effect after the consummation of the transaction described in this Section 3, then only in such event will the Company's securities and property (including cash, where applicable) receivable by the Holder of this Warrant be delivered to the Trustee as contemplated by Section 3.2.

4

4.Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) subdivide its outstanding shares of Common Stock, or (b) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, (but not in the event that the Company shall issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock) then, in each such event, the Purchase Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Purchase Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 4. The number of shares of Common Stock that the Holder of this Warrant shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Purchase Price that would otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the Purchase Price in effect on the date of such exercise. Holder hereby acknowledges and agrees that, without limitation, any reorganization, consolidation, merger or other similar event whereby the holders of Common stock receive the same number of shares of Common Stock as a result thereof as are held thereby immediately prior to such event shall not result in and any adjustment to the Number of Warrant Shares hereunder.

5.Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of this Warrant, the Company will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of this Warrant and prepare a certificate (which the Company shall be promptly sent to the Holder) setting forth such adjustment or readjustment and showing in reasonable detail the facts upon which such adjustment or readjustment is based.

6.Reservation of Stock, etc. Issuable on Exercise of Warrant. The Company will take such actions as shall be required to at all times after the one year anniversary of this Warrant reserve and keep available, solely for issuance and delivery on the exercise of this Warrant, such number of shares of Common Stock from time to time issuable on the exercise of the Warrant.

7.Assignment; Exchange of Warrant. Subject to compliance with all applicable securities laws and regulations, this Warrant, and the right evidenced hereby, may be transferred by the Holder only to an Affiliate of the Holder. On the surrender for exchange of this Warrant, with the Holder’s endorsement in the form of Exhibit B attached hereto (the “Transferor Form”) and together with an opinion of counsel from counsel reasonably satisfactory to the Company, which opinion shall be in form, substance and scope reasonably acceptable to the Company, and to the effect that the transfer of this Warrant will be in compliance with applicable securities laws, the Company at its expense, twice, only, but with payment by the transferor of any applicable transfer taxes, will issue and deliver to or on the order of the transferor thereof a new Warrant or Warrants of like tenor, in the name of the transferor and/or the transferee(s) specified in such Transferor Form, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor. No such transfers shall result in a public distribution of this Warrant. Any attempted transfer not expressly permitted by this Section 7 shall be null and void abinitio.

5

8.Replacement of Warrant. On receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, on delivery of an indemnity agreement and / or security reasonably satisfactory in form and substance and amount, as applicable, to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense, twice only, will execute and deliver, in lieu thereof, a new Warrant of like tenor.

9.Transfer on the Company's Books. Until this Warrant is transferred on the books of the Company (subject to the limitations set forth herein), the Company may treat the registered holder hereof as the absolute owner of this warrant for all purposes, notwithstanding any notice to the contrary.

10.Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall he (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile in each case if delivered during regular business hours), with, in the case of facsimile transaction, accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the business day following the date of mailing by overnight express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: (i) if to the Company to: Strategy International Insurance Group, Inc., 200 Yorkland Blvd., Suite 710, Toronto, Ontario, Canada M2J 5C1, Attn: Sean Maniaci, Esq., facsimile number: _______________, with a copy to Baker & McKenzie LLP, 1114 Avenue of The Americas, New York, NY 10036, Attn: Martin Eric Weisberg, Esq., facsimile number: (212) 310-1786 and (ii) if to the Holder, to Grupo Lakas S.A., Av. De la Hortensa/497, Piso 5 San Borja, Lina, Peru, Attn: M. Otto Demetrio Lakas R., provided that either party may change the address to which notices and other communications shall be sent to it by delivering a written notice as aforesaid to the other party.

11.Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of New York, applicable to agreements made and performed in the State of New York, without regard to any of its conflicts of law principles which would result in the application of the laws of another jurisdiction.

12.Miscellaneous. This Warrant and any term hereof may not be amended, modified, waived, or terminated only by an instrument in writing signed by the Holder and the Company. This Warrant and its terms and provisions shall inure to the benefit of and be binding upon the Company and its successors and assigns and the Holder and its successors and permitted assigns. The section headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof or the construction or interpretation of this Warrant. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

[The Remainder of This Page Has Been Intentionally Left Blank]

6

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by one of its duly authorized officers as of the date first written above.

STRATEGY INTERNATIONAL INSURANCE GROUP, INC.

By: /s/ Louis Lettieri

Name: Louis Lettieri

Title: Chief Financial Officer

7

Exhibit A

FORM OF EXERCISE

(to be signed only on exercise of Warrant)

TO: STRATEGY INTERNATIONAL INSURANCE GROUP, INC.

The undersigned, pursuant to the provisions set forth in the attached Warrant hereby irrevocably elects to purchase:

______________ shares of the Common Stock covered by such Warrant; or

The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant, which is $______________.

The undersigned requests that the certificates for such shares be issued in the name of, and delivered to ______________________________________ whose address is ________________________________________________________________________________________________________________________

The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”), or pursuant to an exemption from registration under the Securities Act and other applicable securities laws.

Dated:_____________________	_____________________________ (Signature must conform to name of holder as specified on the face of the Warrant)
	______________________________ ______________________________ (Address)

8

Exhibit B

FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees” the right represented by the within Warrant to purchase the percentage and number of share of common stock of STRATEGY INTERNATIONAL INSURANCE GROUP, INC. to which the within Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred” respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of STRATEGY INTERNATIONAL INSURANCE GROUP, INC. with full power of substitution in the premises.

  Transferees   Percentage Transferred   Number Transferred

Dated:_____________________________	______________________________________ (Signature must conform to name of holder as specified on the face of the warrant)
Signed in the presence of:
_____________________________________ (Name)	______________________________________ ______________________________________ (address)
ACCEPTED AND AGREED: [TRANSFEREE]	______________________________________ ______________________________________ (address)
_____________________________________ (Name)

9

EX-99.5

CONVERTIBLE PROMISSORY NOTE

$700,000,000	December 14, 2005
	New York, NY

FOR VALUE RECEIVED, Grupo Lakas, S.A. a Panamanian corporation (the “Maker”), hereby promises to pay to the order of Strategy Holding Company Limited, a Barbados company, including any assignee thereof (the “Payee”), the principal sum of Seven Hundred Million United States Dollars ($700,000,000.00), as provided below.

1.Payments.

(a)Principal

The principal amount of this Note, together with all accrued and unpaid interest thereon, shall be due and payable on December 15, 2015 (the "Maturity Date").

(b)Interest

The Maker also promises to pay interest on the unpaid principal amount of this Note, from the date hereof until paid, at the rate of three percent (3%) per annum, calculated on the basis of a year of 365 day for actual days elapsed. Accrued interest on the unpaid principal amount hereof shall be payable semi-annually, on the last Business Day (as hereinafter defined) of each June and December commencing on June 30, 2006 and on the date on which the principal amount hereof is repaid in full (whether at stated maturity, upon prepayment, upon acceleration or otherwise). If any amount is not paid when due, such unpaid amount shall bear interest, payable on demand, both prior to and following any judgment, from the date such amount became due at a rate equal to seven percent (7%)] per annum.

(c)Manner of Payment

All payments under this Note shall be made in immediately available funds in lawful money of the United States of America at the office of the Payee located at Sagicor Corporate Centre Widley, St. Michael, Barbados W.I. or such other place as the Payee may direct in writing.

If any payment date for payment of either principal or interest is not a Business Day (as hereinafter defined) then such payment shall be due on the first Business Day which follows. For purposes hereof, “Business Day” shall mean any day excluding Saturday, Sunday, and any day which is a legal holiday under the laws of New York, or is a day on which banking institutions located in such state are required or authorized by law or other governmental action to close.

2.Voluntary Prepayment By the Maker. The principal amount of this Note may be prepaid, without premium or penalty, in whole or in part, in increments of not less than $100,000, at any time and from time to time on any Business Day, upon not less than five (5) Business Days prior written notice. Any prepayment of the principal amount hereof, whether in part or in whole, shall include accrued interest to the date of prepayment on the principal amount being paid.

3.Master Investment Agreement; Security; Conversion and Prepayment.

(a)This Note is made in connection with that certain Master Investment Agreement, dated as of December 14, 2005 (the “Investment Agreement”), among the Maker, the Payee and certain other parties thereto. As collateral security for the full and prompt payment to the Payee of the Maker’s obligations and liabilities under this Note and the Investment Agreement, the Maker is contemporaneously herewith granting to payee a security interest in certain specified collateral, namely, certain Peat Certificates (as such term is defined in the Security Agreement), pursuant to that certain Security Agreement, dated of even date herewith, among the Maker, the Payee and other parties names therein (as the same shall be amended, supplemented or modified from time to time, the “Security Agreement.”)

(b)From time to time the Company (and its assigns) shall have the right, in the sole discretion thereof, to convert (the “Conversion Right”) the Peat Certificates and the underlying peat constituting collateral for this Note to proceeds thereof, such proceeds to be applied as a deemed prepayment of the outstanding principal balance of this Note, upon the terms and conditions (including, without limitation, the method of valuation to determine the prepayment amount) set forth in the Investment Agreement.

4.Set-off. The Maker hereby agrees that, at any time, whether prior to or after the occurrence of an Event of Default (as hereinafter defined), the Payee is hereby authorized, at any time and from time to time, without presentment, demand, protest or other notice of any kind to the Maker or any other Person, any such notice being hereby expressly waived, to set off against and to appropriate and apply to the payment of the amounts due hereunder (whether matured or unmatured), any and all amounts that the Payee is or may be obligated to pay over to the Maker (including, without limitation, against any dividend on, or amount required as payment in respect of redemption of, preferred stock issued by Strategy Holding Company Limited to Maker.)

5.Representations and Warranties. The Maker represents and warrants to the Payee that:

(a)Corporate Authority/Due Authorization. The Maker is a company duly incorporated and validly existing under the laws of the Republic of Panama and is duly qualified or licensed as a corporation in each jurisdiction wherein failure to so qualify could not reasonably be expected to have a material adverse effect on (i) the business, operations or conditions (financial or otherwise) of the Maker or the Maker and its subsidiaries taken as a whole or (ii) the ability of the Maker to repay or perform its obligations hereunder. The Maker has the power to execute and deliver and carry out the terms of this Note and has taken all necessary action (including, without limitation, shareholder approval, if necessary) to authorize the execution, delivery and performance of this Note and the performance of its obligations hereunder.

-2-

(b)No Conflict. The Maker’s execution, delivery and performance of its obligations under this Note do not and will not contravene or conflict with any provision of (i) applicable law, rule or regulation (ii) any judgment, decree or order applicable or binding upon the Maker, (iii) the corporate charter or by-laws of the Maker, or (iv) any agreement or instrument binding upon the Maker or upon any assets or property of the Maker for which the Maker has obtained the necessary consent or waiver of the other parties to such agreement or instrument.

(c)No Default. The Maker is not in default under any agreement or instrument binding upon the Maker or upon any assets or property of the Maker, which default could have a material adverse effect on (i) the business, operations or condition (financial or otherwise) of the Maker or the Maker and its subsidiaries taken as a whole or (ii) the ability of the Maker to repay or perform its obligations hereunder.

(d)Enforceable Obligation. This Note is the legal, valid and binding obligation of the Maker enforceable against the Maker in accordance with its terms.

(e)Litigation, Etc. No litigation, arbitration proceedings, governmental proceedings or investigations or regulatory proceedings are pending or, to the best of its knowledge, threatened against the Maker which could reasonably be expected to have a material adverse effect on (i) the business, operations or condition (financial or otherwise) of the Maker or the Maker and its subsidiaries taken as a whole or (ii) the ability of the Maker to repay or perform its obligations hereunder.

6.Covenants. The Maker agrees that: (i) it will maintain its corporate existence and good standing in each jurisdiction wherein such qualification is necessary; (ii) the ratio of the total market value of the Peat Certificates comprising the collateral pursuant to the Security Agreement to the outstanding principal balance of this Note will at no time be less than the Required Ratio, as such term is defined in and determined in accordance with the Investment Agreement.

7.Events of Default. If any of the following events (herein called an “Event of Default”) shall occur or exist:

(a)Payment Default. The Maker fails to make any payment of principal or interest on this Note when due;

(b)Other Defaults. The Maker fails to perform any obligation or breaches any covenants contained in this Note, the Investment Agreement or the Security Agreement;

(c)Representations and Warranties. Any representation or warranty made by the Maker herein is false or misleading in any material respect;

-3-

(d)Bankruptcy. (i) The Maker shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Maker shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Maker any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of thirty (30) days; or (iii) there shall be commenced against the Maker any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal with thirty (30) days from the entry thereof; or (iv) the Maker shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Maker shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due;

(e)Judgments. One or more non-interlocutory judgments, non-interlocutory orders, decrees or arbitration awards shall be entered against the Maker involving in the aggregate a liability (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage) as to any single or related series of transactions, events or conditions, of $1,000,000 or more, and the same shall remain unsatisfied, unvacated and unstayed pending appeal for a period of thirty (30) days after the entry thereof; or

(f)Asset Sales. The Maker sells, transfers, distributes or disposes of all or substantially all of its assets other than in the ordinary course of business or merges or consolidates with another entity.

then the Payee may, by written notice to the Maker, declare the principal amount plus accrued interest on this Note to be immediately due and payable (provided that upon the occurrence of an Event of Default as described in Section 7(d) above, the principal amount plus accrued interest on this Note shall become immediately due and payable without any action by the Payee), whereupon the same shall become due and payable without demand, presentment, protest or other notice, all of which are hereby expressly waived, and exercise all other rights available to the Payee under applicable law or otherwise. The Payee’s rights and remedies hereunder are cumulative and non-exclusive.

8.Waiver. No delay on the part of the Payee in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by the Payee of any right, power or remedy preclude other or further exercise thereof, or the exercise of any other right , power or remedy. No waiver by the Payee of any right or remedy hereunder shall be effective unless in a writing signed by the Payee. The Maker hereby waives diligence, presentment, protest, demand and notice of every kind and, to the fullest extent permitted by law, the right to plead any statute of limitations as a defense to any demand hereunder.

-4-

9.Amendments. No amendment, modification or waiver of, or consent with respect to, any provision of this Note shall in any event be effective unless the same shall be in writing and signed and delivered by the Payee, and then any such amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

10.Governing Law. This Note shall be an instrument made under and governed by the laws of New York without regard to conflicts of laws and provisions which would result in the application of the substantive laws of another jurisdiction.

11.Severability. Wherever possible, each provision of this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Note shall be prohibited by or invalid under such law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note.

12.Successors and Assigns. This Note shall be binding upon the Maker and upon the Maker’s successors and assigns, and shall inure to the benefit of the Payee and the Payee’s successors and assigns. The Maker shall have no right to assign its rights or delegate its duties and obligations under this Note.

13.Costs and Expenses. The Maker promises to pay, upon the Payee’s demand therefor, all costs and expenses, including reasonable attorneys’ fees, incurred in the collection and enforcement of this Note.

14.Notice.

(a)All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by facsimile and electronic transmission) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made (a) in the case of delivery by hand, when delivered, (b) in the case of delivery by mail, three (3) days after being deposited in the mails, postage prepaid, or (c) in the case of delivery by facsimile or electronic transmission, when sent and receipt has been confirmed, addressed as follows:

The Maker: Grupo Lakas S.A. Via Fernandez de Cordoba # 69 Panama, Rep. de Panama Attention: Otto D. Lakas Facsimile No.: 507-261-9719 Email: olakas@grupolakas.com

-5-

The Payee Strategy Holding Company Limited 200 Yorkland Blvd., Suite 710 Toronto, Ontario Canada M2J 5C1 Attention: Louis E. Lettieri Facsimile: 416-391-4985 Email: llettieri@sgyi.com

provided that either party may change the address to which notices and other communications shall be sent to it by delivering a written notice as aforesaid to the other party.

15.WAIVER OF JURY TRIAL. EACH OF THE MAKER AND THE PAYEE WAIVES IRREVOCABLY THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING IN WHICH THE MAKER AND THE PAYEE ARE ADVERSE PARTIES.

16.CONSENT TO JURISDICTION. THE MAKER HEREBY IRREVOCABLY AGREES THAT ANY SUIT, ACTION, PROCEEDING OR CLAIM AGAINST IT ARISING OUT OF, OR RELATING TO, THIS NOTE OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF MAY BE BROUGHT AND ENFORCED IN ANY STATE OR FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND THE MAKER HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY SUIT, ACTION, PROCEEDING OR CLAIMS. THE MAKER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT ALLOWED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE BROUGHT IN ANY STATE OR FEDERAL COURT SITTING IN, NEW YORK , NEW YORK AND HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM. THE MAKER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION, SUIT OR PROCEEDING OR CLAIM BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH BELOW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE PAYEE TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE MAKER IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW.

17.Indemnification. The Maker shall defend, indemnify and hold harmless the Payee and its officers and agents against (a) all obligations, demands, claims, and liabilities claimed or asserted by any person in connection with the transactions contemplated by this Note, and (b) all losses or expenses in any way suffered, incurred, or paid by the Payee as a result of or in any way arising out of, following, or consequential to transactions between the Payee and the Maker under this Note, the Security Agreement or otherwise (including without limitation reasonable attorneys fees and expenses), except for losses caused by the Payee’s gross negligence or willful misconduct.

-6-

IN WITNESS WHEREOF, the Maker has executed and delivered this Note as of the day and year and the place first above written.

GRUPO LAKAS, S.A.

/s/ Otto Demetrio Lakas R.

By: Otto Demetrio Lakas R.

Its: President

-7-

EX-99.6

MASTER INVESTMENT AGREEMENT

Master Investment Agreement, dated as of December 14, 2005 (this “Agreement”), by and among Grupo Lakas S.A., a Panamanian corporation (the “Investor”), Panama Peat S.A., a Panamanian corporation (“PPSA”), Changuinola Peat S.A., a Panamanian corporation (“CPSA” and together with PPSA, the “Issuers”), Strategy Holding Company Limited, a Barbados company (the “Company”), and Strategy International Insurance Group, Inc., a Texas corporation (“Strategy”).

R E C I T A L S

A.The Investor has agreed to make an investment in the Company (the “Investment“) of that certain secured convertible promissory note, issued by the Investor in favor of the Company, in the original principal amount of $700,000,000 (as amended, restated, supplemented or otherwise modified from time to time, the “Note”), upon the terms and subject to the conditions set forth herein, in consideration for certain preferred shares of the Company, as more fully described herein.

B.The obligations of the Investor under the Note will be secured by certain Peat Certificates (as defined below) and the peat evidenced thereby, which peat certificates shall be delivered to the Company pursuant to the terms of that certain security agreement, dated of even date herewith, by and between the Investor and the Company (the “Security Agreement”).

C.In connection with and as consideration for the making of the Investment, Strategy has agreed to issue a warrant to the Investor for the purchase of shares of Strategy, pursuant to the terms of that certain warrant agreement made by Strategy to the Investor (the “Warrant”), and the Strategy shares acquired pursuant thereto shall be subject to that certain registration rights agreement between Strategy and the Investor (the “Registration Rights Agreement”).

Now therefore, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1

DEFINITIONS 

Definitions Used Herein. When used in this Agreement, the following terms shall have the following meanings:

1.1Ancillary Agreements shall mean any and/or all of (i) the Note, (ii) the Security Agreement, (iii) the Warrant, and (iv) the Registration Rights Agreement.

1.2Approval Date shall mean the date on which the Supervisor of Insurance in Barbados approves the Further Investment as authorized regulatory capital of Strategy Insurance under Barbados law.

1.3Business Day shall mean a day other than a Saturday or Sunday on which commercial banks in New York State are authorized permitted to open for the transaction of customary banking business.

1.4Certificate of Designation shall have the meaning set forth in Section 3.1.3.

1.5Closing shall have the meaning set forth in Section 2.2.

1.6Closing Certificate shall mean a certificate, issued by a senior officer of the relevant entity, attaching thereto a certificate of incumbency with respect to the signature of each individual executing and delivering any documents or instruments on behalf of such entity (ii) a copy of a good standing certificate or similar document issued by the relevant Governmental Authority with respect to such entity; and (iii) a copy of the resolutions of the governing body of such entity, authorizing the execution, delivery and performance by such entity of, as applicable, this Agreement and the Ancillary Agreements to which such entity is a party in accordance with their respective terms and of any other documents contemplated hereunder and the consummation of the transactions contemplated hereby and thereby.

1.7Closing Date shall have the meaning set forth in Section 2.2.

1.8Company Common Stock shall have the meaning set forth in Section 4.4.

1.9Company Preferred Stock shall have the meaning set forth in Section 4.4.

1.10Conversion Right shall have the meaning set forth in Section 2.1

1.11CPSA shall have the meaning set forth in the preamble to this Agreement.

1.12CPSA Hectares shall have the meaning set forth in Section 7.3.

1.13Event of Default shall have the meaning set forth in Section 9.1.

1.14Further Investment shall have the meaning set forth in Section 8.6.

1.15Governmental Authority shall mean, with respect to any party hereto, any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

1.16Investment shall have the meaning set forth in Section 2.1.

- 2 -

1.17Material Adverse Effect shall mean, with respect to a party hereto, a material adverse effect on the business, operations, liabilities, properties, assets or financial condition of such party.

1.18Other Person shall mean any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Authority not a party to this Agreement.

1.19Peat Certificates shall mean the bearer certificates for peat issued by the Issuers together with the additional bearer certificates for peat, if any, that the Issuers shall issue from time to time and deliver to the Company (or assigns), pursuant to the terms hereof and of the Security Agreement, each of which is described in the Security Agreement, as listed on Exhibit 1.16 hereto).

1.20Peat Concessions shall mean the concessions granted by the Republic of Panama to (i) PPSA on October 17, 2005 and (ii) CPSA on July 7, 1999.

1.21Peat Reduction Amount shall mean (x) with respect to any sale or assignment of a Peat Certificate, the value of the peat evidenced thereby as stated on the face of such Peat Certificate; and (y) with respect to any sale or assignment of peat underlying any such Peat Certificate, the ex-Mine price of such peat, the value of such peat, the value in each case determined pursuant to the Valuation Method.

1.22PPSA shall have the meaning set forth in the preamble to this Agreement.

1.23PPSA Hectares shall have the meaning set forth in Section 7.1.

1.24Preferred Shares shall have the meaning set forth in Section 2.1.

1.25Redemption shall have the meaning set forth in Section 2.1.

1.26Redemption Amount shall be $700,000,000, plus any accrued and unpaid dividends.

1.27Registration Rights Agreement shall have the meaning assigned thereto in Recital C above.

1.28Required Ratio shall have the meaning set forth in Section 8.2.

1.29Securities Act shall mean the Securities Act of 1933, as amended, or any successor law, and regulations and rules issued pursuant to such act or successor law.

1.30Security Agreementshall have the meaning assigned thereto in Recital B above.

1.31Strategy Insurance shall mean Strategy Insurance Limited, a Barbados company.

- 3 -

1.32Valuation Method shall mean the greater of (x) the “ex-mine price” of peat, based on the price as quoted from time to time by, and based on the then most current quote of, the United States Department of Agriculture, and (y) the ex-Mine price of peat as determined from time to by the independent appraiser retained by the Company in accordance with this Agreement.

1.33Warrant shall have the meaning set forth in Recital C above.

1.34Additional Definitional Provisions. For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

1.34.1the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

1.34.2accounting terms not otherwise defined herein have the meanings assigned to them in accordance with United States generally accepted accounting principles as in effect from time to time;

1.34.3references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs” and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;

1.34.4a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;

1.34.5the words “herein”, “hereof”, “hereunder”, “hereto”, “hereby” and other words of similar import refer to this Agreement as a whole and not to any particular provision; and

1.34.6the terms “include” and “including” shall mean without limitation by reason of enumeration.

ARTICLE 2

CLOSING

2.1Investment of the Note; Terms of the NoteSubject to the terms and conditions of this Agreement, at the Closing, the Investor shall assign, transfer, convey and contribute (the “Investment”) to the Company, and the Company shall accept and acquire from the Investor, the Note and the Investor shall simultaneously deliver therewith the Peat Certificates securing the same. The parties hereto hereby agree, and the Note shall provide, that at any time and from time to time the Company (and its assigns) shall have the right, in the sole discretion thereof, to convert (the “Conversion Right”) the Peat Certificates and/or the underlying peat constituting collateral for the Note to cash proceeds, such cash proceeds to be applied as a deemed prepayment of the outstanding principal balance of, and accrued interest on, the Note (and such amounts shall be applied to either the outstanding interest or principal balance, as determined by the Company in its sole discretion.) To exercise the Conversion Right, the Company (or its assigns) may from time to time, at its sole discretion, sell or assign one or more of the Peat Certificates, and/ or may mine, or cause to be mined, all or any of the peat evidenced by any such Peat Certificate, in accordance with the terms of the relevant Peat Concession. Upon the exercise by Company and/or its assigns of such Conversion Right and the consummation of the sale of the relevant Peat Certificate and/or underlying peat without any further action being required by either the Investor, the Company or its assigns, the principal balance of, and/or accrued interest on, the Note shall be reduced by the Peat Reduction Amount for such transaction. In such connection, not later than fifteen (15) days after the consummation of any such sale of a Peat Certificate or the underlying peat, the Company shall deliver to the Investor a notice (the “Reduction Notice”), setting forth the Peat Reduction Amount, and indicating that such amount has been applied as a prepayment on and a reduction of the outstanding principal balance of, and/or accrued and unpaid interest on, the Note.

- 4 -

2.2Issuance of Preferred Shares In consideration for the Investment, the Company shall issue to the Investor 24 shares of the Company’s nonvoting preferred stock, designated as Class D Preferred Stock (the “Preferred Shares”). The Preferred Shares shall have the following rights, preferences, privileges and restrictions:

2.2.1Dividend on the Preferred Shares. Each of the Preferred Shares shall carry a dividend, payable out of realized profits or surplus of the Company available for dividends, at an annual rate of 3.43% (i.e., One Million Dollar (US$1,000,000) per share per annum (the “Base Dividend”), which shall accrue and be payable on the last day of June and December in each year, commencing on June 30, 2006. In addition to the Base Dividend, the Preferred Shares will provide an additional dividend (the “Bonus Dividend”), payable out of realized profits or surplus of the Company available for dividends, equal to the dividend (the “SIL Bonus Dividend”) payable to the Company by its subsidiary Strategy Insurance Limited, a Barbados company (“SIL”) and a subsidiary of Holdings, which SIL Dividend (and therefore the Bonus Dividend) shall equal 12% of the gross insurance premiums written by SIL during each calendar year (pro rated for partial years) following the Closing in excess of $200,000,000; provided that neither the SIL Dividend nor, consequently, the Bonus Dividend, shall exceed $60,000,000 with respect to any calendar year.

2.2.2Redemption of the Preferred Shares. The Preferred Shares shall be redeemable by the Company at any time, in whole or in part, upon not less than five (5) Business Days prior notice to the Investor, for the Redemption Amount.

2.2.3Non-Convertible.The Preferred Shares shall not be convertible into any other shares (of whatever class) of the capital of the Company.

2.2.4Non-Assignable. The Preferred Shares may not be, and the Investor hereby covenants and agrees that it shall not cause or permit the Preferred Shares to be sold, assigned, transferred or hypothecated.

- 5 -

2.2.5Board Seats. As long as 50% of the Preferred Shares are outstanding and held by the Investor, the Investor shall be entitled to appoint two members of the Board of Directors of Strategy, which appointment shall be effectuated within thirty (30) days following the Approval Date. Except for such right to appoint directors, the holder of the Preferred Shares shall have no voting right.

2.3Closing. The closing of the Investment (the "Closing") shall take place at the New York offices of Baker & McKenzie LLP, subject to the satisfaction or waiver of the conditions set forth in Article 3, on December 14, 2005, or such other earlier date as is agreed to by the parties to this Agreement (the “Closing Date”).

2.4Deliveries. At the Closing, subject to the terms and conditions hereof, in addition to the documents set forth elsewhere herein, which are required to have been entered into prior to or as of the date of the Investment, the following deliveries shall be made:

2.4.1the Company, will deliver to the Investor:

(a)one or more stock certificates representing the Preferred Shares, registered in the Company’s name;

(b)a Closing Certificate;

(c)the Warrant;

(d)the Registration Rights Agreement;

(e)evidence that the Company and/or the Investors have caused to be registered in the public register of Panama liens in favor of the Company and its assigns with respect to all of the peat subject to the Peat Certificates, including, without limitation, any and all Peat Certificates which may from time to time be delivered after the Closing pursuant to the terms hereof and of the Security Agreement; and

(f)such other certificates, documents or instruments as the Investor shall reasonably request.

2.4.2the Investor will deliver to the Company:

(a)the Note, duly executed by the Investor;

(b)the Security Agreement, duly executed by the Investor;

(c)the Peat Certificates duly transferred to the Company or its nominee;

(d)an opinion of counsel in form and substance acceptable to the Company;

- 6 -

(e)a Closing Certificate; and

(f)such other certificates, documents or instruments as the Company shall reasonably request.

ARTICLE 3

PRECONDITIONS TO CLOSING

3.1Conditions to the Investor’s Obligations at the Closing. The Investor’s obligations to make the Investment at the Closing are subject to the satisfaction, at or prior to the Closing, of the following conditions:

3.1.1Representations and Warranties True. The representations and warranties made by the Company herein shall be true and correct in all material respects as of the Closing Date with the same force and effect as if they had been made as of the Closing Date.

3.1.2Consents, Permits, and Waivers. The Company shall have obtained any and all consents, permits and waivers necessary or appropriate for issuance of the Preferred Shares in consideration of the Investment, except for such as may be properly obtained subsequent to the Closing.

3.1.3Amendment of Certificate of Incorporation. An amendment to the Certificate of Incorporation authorizing the Preferred Shares shall have been approved by, if required, the shareholder(s), and by the Board of Directors of the Company, and the same shall be promptly filed with the relevant Barbados governmental authorities, and shall thereafter be in full force and effect.

3.2Conditions to the Company’s Obligations at the Closing. The Company’s obligation to accept the Investment and to issue the Preferred Shares at the Closing are subject to the satisfaction, on or prior to the Closing, of the following conditions:

3.2.1Representations and Warranties True. The representations and warranties made by the Investor and each Issuer herein shall be true and correct in all material respects as of the Closing Date, with the same force and effect as if they had been made as of the Closing Date.

3.2.2Performance of Obligations. The Investor and the Issuers shall have performed and complied with all agreements and conditions herein required to be performed or complied with by the Investor and the Issuers on or before the Closing.

3.2.3Consents, Permits, and Waivers. The Investor and each Issuer shall have obtained any and all consents, permits and waivers necessary or appropriate for consummation of the transactions contemplated by the Agreement.

- 7 -

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to the Investor as follows:

4.1Organization and Qualification. It is duly organized and is validly existing and in good standing under the laws of Barbados, with all requisite corporate power and authority to own, operate and lease its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing and in good standing or to have such power or authority is not, in the aggregate, reasonably likely to have a Material Adverse Effect. The Company is qualified or licensed to do business and is in good standing in each jurisdiction where the nature of the business conducted by it or the properties owned or leased by it requires qualification, except where the failure to be so qualified or licensed is not, in the aggregate, reasonably likely to have a Material Adverse Effect.

4.2Corporate Authority. The execution and delivery by the Company of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by, as applicable, the board of directors or other governing body, as applicable, of the Company and no other corporate proceedings on the part of the Company are necessary to authorize or to consummate the transactions contemplated hereby on the dates the same are intended to be so consummated. This Agreement and each of the Ancillary Agreements has been duly and validly executed by the Company, and this Agreement and the Ancillary Agreements constitute valid and binding agreements of the Company, enforceable against the Company in accordance with the terms hereof and thereof, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights; and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

4.3No Violation. The execution and delivery of this Agreement and each of the other Ancillary Agreements and the performance by the Company of its obligations hereunder and under the Ancillary Agreements, and the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements will not, violate, conflict with or result in any breach of any provision of the its organization documents.

4.4Issuance of Preferred Shares. Upon the delivery to the Company of the duly executed Note and the Peat Certificates, and the delivery to the Investor of the certificate(s) evidencing the Preferred Shares, the Preferred Shares will be validly issued, fully paid and non-assessable.

4.5Consents. No consent, approval, authorization or order of any federal, state or local court or governmental agency or body is required for the consummation the Company of the transactions contemplated hereby or by any of the Ancillary Agreements, other than as have been obtained thereby.

- 8 -

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

The Investor hereby makes the following representations and warranties:

5.1Organization and Qualification. The Investor is a corporation duly organized, validly existing and in good standing under the laws of Panama, with all requisite corporate power and authority to own, operate and lease its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing and in good standing or to have such power or authority is not, in the aggregate, reasonably likely to have a Material Adverse Effect. The Investor is qualified or licensed to do business and is in good standing in each jurisdiction where the nature of the business conducted by it or the properties owned or leased by it requires qualification, except where the failure to be so qualified or licensed is not, in the aggregate, reasonably likely to have a Material Adverse Effect.

5.2Corporate Authority. The execution and delivery by the Investor of this Agreement and the Ancillary Agreements and consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by its board of directors or other governing body, as applicable, and no other corporate proceedings on the part of the Investor are necessary to authorize or to consummate the transactions contemplated hereby on the dates the same are intended to be so consummated. This Agreement and each of the Ancillary Agreements has been duly and validly executed by the Investor, and this Agreement and the Ancillary Agreements constitute valid and binding agreements of the Investor, enforceable against the Investor in accordance with the terms hereof and thereof, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights; and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

5.3No Violation. The execution and delivery of this Agreement and as applicable, each of the Ancillary Agreements and the performance by the Investor of its obligations, hereunder and under the Ancillary Agreements, and the consummation by the Investor of the transactions contemplated by this Agreement and the Ancillary Agreements will not (a) violate, conflict with or result in any breach of any provision of the Articles of Incorporation or Bylaws, or similar formation documents, of the Investor, (b) violate, conflict with or result in a violation or breach of, or constitute a default (with or without due notice or lapse of time or both) under the terms, conditions or provisions of any note, bond, mortgage, indenture or deed of trust, or any material license, lease or agreement to which the Investor is a party, or (c) violate any order, writ, judgment, injunction, decree, statute, rule or regulation of any court or Governmental Authority applicable to the Investor, except such defaults and violations which, in the aggregate, are not reasonably likely to have a Material Adverse Effect.

5.4No Litigation. No litigation (including, but not limited to actions, suits or proceedings in Panama or by or before any Governmental Authority of Panama or any subdivision thereof) is pending or threatened against, relating to, or affecting the Investor or any of its properties, rights or assets.

- 9 -

5.5Solvency. The Investor has been solvent at all relevant times prior to, and will not be rendered insolvent by, its transfer of the Peat Certificates to the Company.

5.6Investment Intent. The Investor is acquiring the Preferred Shares hereunder and the right to acquire Company Common Stock pursuant to the Warrant for its own account and with no present intention of distributing or selling the Preferred Shares or the Company Common Stock, and the Investor will not transfer the Preferred Shares or the Company Common Stock in violation of the Securities Act or any applicable state securities law, or otherwise, and no one other than the Investor has any beneficial interest in the Preferred Shares. The Investor will not sell or otherwise dispose of any of the Preferred Shares or the Company Common Stock and the Investor understands that the Preferred Shares and the Company Common Stock being acquired hereunder have not been registered under the Securities Act by reason of their contemplated issuance in transactions exempt from the registration and prospectus delivery requirements of the Securities Act pursuant to Section 4(2) thereof, and that the reliance of the Company on such exemption from registration is predicated in part on these representations and warranties of the Investor. The Investor acknowledges that a restrictive legend consistent with the foregoing has been or will be placed on the certificates for the Preferred Shares.

5.7Consents. No consent, approval, authorization or order of any federal, state or local court or governmental agency or body is required for the consummation by the Investor of the transactions contemplated hereby or by any of the Ancillary Agreements, other than as have been obtained thereby.

5.8Investor Status. The Investor is either an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act, or is not a “U.S. person” as such term is defined in Rule 902(k)(1) of Regulation S under the Securities Act and is not acquiring the Preferred Shares for the account or benefit of any U.S. person. The Investor has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment to be made by it hereunder. The Investor has consulted with its own legal, tax and business advisors regarding this transaction. The Preferred Shares and the Company Common Stock to be acquired by the Investor upon the making of the Investment or pursuant to the Warrant will be acquired for investment purposes for the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Investor further represents that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the securities.

5.9Investment Experience. The Investor is able to bear the economic risk of its investment and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Company.

- 10 -

5.10Disclosure of Information. The Investor has been furnished with access to all information and filings relating to the business, finances and operations of the Company which have been requested thereby. The Investor has been afforded the opportunity to ask questions of representatives of the Company and has received answers to such questions, as the Investor deems necessary in connection with its decision to make the Investment and acquire the Preferred Shares.

5.11Compliance with Laws. The Investor has complied with all applicable laws of its jurisdiction in connection with the subscription of the securities pursuant to this Agreement and otherwise in connection with this Agreement, including (i) the legal requirements within its jurisdiction for the acquisition of the Preferred Shares the Company Common Stock pursuant to the Warrant; (ii) any foreign exchange restrictions applicable to such purchase; (iii) any governmental or other consents that may need to be obtained; and (iv) the income tax and other consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Preferred Shares or the Company Common Stock. The Investor’s subscription and payment for, and its beneficial ownership of, the Preferred Shares and the Company Common Stock will not violate any applicable security or other law of the Investor’s jurisdiction.

5.12Independent Decision. The Investor is not relying on any of the Company or any of its affiliates or on any legal or other opinion in the materials reviewed by the Investor with respect to the financial or tax considerations of the Investor relating to its investment in the Company. The Investor has relied solely on the representations and warranties, covenants and agreements regarding the Company in this Agreement and on its examination and independent investigation in making its decision to acquire the Preferred Shares and Company Common Stock pursuant to the Warrant.

5.13Brokers or Finders. The Investor has incurred no liability for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with the transactions contemplated by this Agreement or the Ancillary Agreements.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF THE ISSUER

Each of the Issuers hereby makes the following representations and warranties:

6.1Organization and Qualification. Each of the Issuers is a corporation duly organized, validly existing and in good standing under the laws of Panama, with all requisite corporate power and authority to own, operate and lease its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing and in good standing or to have such power or authority is not, in the aggregate, reasonably likely to have a Material Adverse Effect. Each of the Issuers is qualified or licensed to do business and is in good standing in each jurisdiction where the nature of the business conducted by it or the properties owned or leased by it requires qualification, except where the failure to be so qualified or licensed is not, in the aggregate, reasonably likely to have a Material Adverse Effect.

- 11 -

6.2Corporate Authority. The execution and delivery by each of the Issuers of this Agreement and the Ancillary Agreements to which it is a party, and consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by its board of directors or other governing body, as applicable, and no other corporate proceedings on the part of such Issuer are necessary to authorize or to consummate the transactions contemplated hereby on the dates the same are intended to be so consummated. This Agreement and each of the Ancillary Agreements has been duly and validly executed by each of the Issuers, and this Agreement and the Ancillary Agreements, to which it is a party, constitute valid and binding agreements of each such Issuer, enforceable against such Issuer in accordance with the terms hereof and thereof, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights; and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

6.3No Violation. The execution and delivery of this Agreement and as applicable, each of the Ancillary Agreements to which each Issuer is a party, and the performance by each such Issuer of its obligations, hereunder and under the Ancillary Agreements, and the consummation by such Issuer of the transactions contemplated by this Agreement and the Ancillary Agreements, as applicable, will not (a) violate, conflict with or result in any breach of any provision of the Articles of Incorporation or Bylaws, or similar formation documents, of such Issuer, (b) violate, conflict with or result in a violation or breach of, or constitute a default (with or without due notice or lapse of time or both) under the terms, conditions or provisions of any note, bond, mortgage, indenture or deed of trust, or any material license, lease or agreement to which such Issuer is a party, or (c) violate any order, writ, judgment, injunction, decree, statute, rule or regulation of any court or Governmental Authority applicable to such Issuer, except such defaults and violations which, in the aggregate, are not reasonably likely to have a Material Adverse Effect.

6.4No Litigation. No litigation (including, but not limited to actions, suits or proceedings in Panama or by or before any Governmental Authority of Panama or any subdivision thereof) is pending or threatened against, relating to, or affecting any Issuer, its respective Peat Concession, any of its properties, rights or assets.

6.5Consents. No consent, approval, authorization or order of any federal, state or local court or governmental agency or body is required for the consummation by either Issuer of the transactions contemplated hereby or by any of the Ancillary Agreements, other than as have been obtained thereby, except that in order for the Company or any person other then the Issuer to extract material from the Peat Concessions, it must obtain the approval Ministry of Commerce and Industry of Panama with respect to its technical competence to perform such extraction.

6.6Brokers or Finders. No Issuer has incurred liability for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with the transactions contemplated by this Agreement or the Ancillary Agreements.

6.7Capitalization. The Investor is the sole shareholder of each of the Issuers.

- 12 -

ARTICLE 7

PEAT REPRESENTATIONS AND WARRANTIES

The Investor and each of the Issuers hereby jointly and severally makes the following representations and warranties, as of the date hereof, and as of the Closing Date and each such representation and warranty shall survive the Closing and shall be deemed to have been remade on each day thereafter unless and until the Note shall no longer be outstanding:

7.1PPSA has been granted and currently holds mining rights to 24,739,3517 hectares in Bocas del Toro Province, Panama (the “PPSA Hectares”) pursuant to the PPSA Concession, which PPSA Concession has an initial term of 6 years for exploration and 25 years for development, and is renewable upon written request by PPSA or its assignee for three added periods in an aggregate of 20 years.

7.2The terms of the PPSA Concession require that PPSA’s only obligation to maintain the PPSA Concession is the PPSA make an annual payment to the Republic of Panama in the amount of $10,514.50 plus any royalties that accrue following extraction and shipment of material. Pursuant to Article 210 of the Mining Code, this amount corresponds to $0.50 per hectare per year less a 15% discount pursuant to Law #32 dated February 9, 1996. Further pursuant to Article 211, royalty payments accrue to the State at the rate of 2% of its value as determined by shipping bill of lading or commercial invoice. Pursuant to the PPSA Concession, PPSA holds access rights to the PPSA Hectares by virtue of its Concession and further holds peremptory rights to the surface area for the purpose of effecting extraction of the material to permit PPSA to mine, process and ship the peat located on the PPSA Hectares.

7.3CPSA has been granted and currently holds mining rights to 17,517,5290 hectares in Bocas del Toro Province, Panama (the “CPSA Hectares”) pursuant to the CPSA Concession which CPSA Concession has an initial term of 40 years, and is renewable without the need for CPSA or any other Person to take any action.

7.4The terms of the CPSA Concession require that CPSA’s only obligation to maintain the CPSA Concession is that CPSA make an annual payment to the Republic of Panama in the amount of $7,445.15. Pursuant to Article 210 of the Mining Code, this amount corresponds to $0.50 per hectare per year less a 15% discount pursuant to Law #32 dated February 9, 1996. Further pursuant to Article 211, royalty payments accrue to the State at the rate of 2% of its value as determined by shipping bill of lading or commercial invoice. Pursuant to the CPSA Concession, CPSA holds access rights to the CPSA Hectares by virtue of its Concession and further holds peremptory rights to the surface area for the purpose of effecting extraction of the material to permit CPSA to mine, process and ship the peat located on the CPSA Hectares.

7.5Each of the Peat Concessions is in full force and effect and no proceedings have been commenced to revoke, and there exists no lien, claim or encumbrance on or with respect to either Peat Concession.

- 13 -

7.6Each Peat Certificate has been validly and duly issued by the relevant Issuer upon approval of the majority of their respective shareholders, and each Peat Certificate has been executed by its respective president and secretary and constitutes the legal, valid and binding obligation of such Issuer, enforceable in accordance with its terms and each represents the binding and irrevocable obligation of such Issuer thereof to deliver the value of peat described therein. The value of each Peat Certificate delivered hereby is and shall at all times be $50,000,000 (subject only to a sale of underlying peat upon exercise of the Conversion Right.). Each such Peat Certificate provides, by its terms, that if the fair market value of the peat underlying the Peat Certificates drops below $50,000,000 (determined in accordance with the Valuation Method), without any action being required to be taken by the Company or any Issuer or any other Person, the volume of peat evidenced by such Peat Certificate shall automatically be adjusted by such amount so that the value of such Peat Certificate shall be $50,000,000 (stated in the Peat Certificates as a proportional adjustment in volume between the face dollar amount of such peat as stated on such certificate and the fair market value of such volume of peat at presentation of such Peat Certificate.) The Peat Certificates constitute a hypothecation to the bearer of that portion of the Concession granted to the Issuer to mine peat at the location specified on the relevant Peat certificate; entitle the holder (whether or not Panamanian and without limitation including the Company) thereof to exercise both the surface rights and the access rights, and to exercise the Concession rights, and acquire the peat from the ground (i.e. mine the peat) in the quantities evidenced by the relevant Peat certificate.

7.7The rights granted pursuant to the Peat Certificates will not be invalidated, altered or hypothecated by the issuance of subsequent bearer certificates for peat.

7.8Each of the Issuers has been granted surface rights by the government of Panama, appropriate to permit the access to, and mining of, the Peat subject to the relevant Peat Concession.

7.9There is no over-issuance of peat certificates by either Issuer and none is contemplated or authorized. The PPSA Peat Certificate corresponds to less than 0.3% of PPSA’s proven reserves and the CPSA Peat Certificate corresponds to less than 0.22% of CPSA’s proven reserves.

7.10All factual information contained on each of the Peat Certificates is true and correct in all respects, and each signature on each Peat Certificate is genuine. Each Peat Certificate is an original and is true and complete, and each represents the right to obtain that amount of peat that the same purports to so represent.

7.11The peat that is covered by the Peat Certificates meets the specifications as fully described in The Peat Deposits of Northwest Panama, Los Alamos National Laboratory publication LANL-11211, volume II (1990).

7.12The aggregate value of the Peat Certificates delivered on the Closing Date is and shall at all times be not less than the Required Ratio, determined in accordance with Section 8.2.

- 14 -

ARTICLE 8

POST-CLOSING COVENANTS AND AGREEMENTS

8.1Covenant of the Investor and the Issuers Regarding Peat. Each of the Investor and the Issuers hereby covenants and agrees that from and after the Closing Date until termination of this Agreement it shall not:

8.1.1sell encumber, transfer or otherwise dispose of, or grant any option with respect to, any of the Peat Certificates without the prior written consent of the Company,

8.1.2sell, encumber, transfer or otherwise dispose of or hypothecate the land on which the peat represented by the Peat Certificate is located in any way or any portion thereof nor create or permit to exist any lien upon or with respect to any of such Peat Certificates, and will defend the Peat Certificates against, and take such other action as is necessary to remove, any lien or encumbrance, except for the security interest under the Security Agreement, and (ii) if such transfer or other disposition relates to less then 70%, in the aggregate at any one time, of the total land on which any peat is located and which is owned by or under the control of either Issuer.

8.1.3enter into any agreement or understanding that purports to or may restrict or inhibit the Company’s rights or remedies hereunder or under the Ancillary Agreements, including, without limitation, the Company’s right to sell or otherwise dispose of the Peat Certificates.

8.1.4take, or permit to be taken, any act or omission (including failure to make required annual payments to the relevant governmental authorities), which might result in the termination or cancellation of either Concession.

8.2Covenant Regarding Value of the Peat Certificates. Each of the Investor and the Issuers hereby covenants and agrees that from and after the Closing Date until termination of this Agreement neither the Investor nor the Issuers shall permit ratio of (x) the aggregate value of the Peat Certificates, determined in accordance with the Valuation Method, delivered to and held by the Company (or assigns) to (y) the outstanding principal balance of the Note to be less than 9:7 (the “Required Ratio.”) (By way of example, at the Closing, as the outstanding principal balance of the Note is $700,000,000, the aggregate value of the Peat Certificates delivered and then held by the Company (or assigns), determined by the Valuation Method, shall not be less than $900,000,000.) If the value of the Peat Certificates so held by the Company (or assigns) shall fall below the Required Ratio, the Investor and the Issuers undertake to immediately deliver to the Company or its assignee additional bearer certificates for peat issued by one of the Issuers, in the same form and having the same terms as the Peat Certificates delivered at Closing, and the value of such additional bearer certificates for peat which shall increase the aggregate value of the delivered Peat Certificates to not less than the Required Ratio. In connection therewith, the Company and its assigns shall have the right to engage independent outside appraisers, within 60 days following the date of the Closing, and on no greater than a twice yearly basis, to determine the value of the Peat Certificates, in accordance with the Valuation Method. The cost of such appraisal shall be borne by the Company unless value of the delivered Peat Certificates shall have been determined by such appraisal to be more than 3% below the Required Ratio.

- 15 -

8.3Books, Records, and Notices. Each of the Investor and the Issuers hereby covenants and agrees that it will keep proper books of record and corporate books, in which full and correct entries shall be made of all financial transactions and the assets and business thereof, including without limitation the issuance of any peat certificate and each of the Investor and the Issuers will permit, upon reasonable prior notice to the chief financial officer the Investor or any Issuer, (x) officers and designated representatives of the Company to visit and inspect any of the properties or assets of the Investor and any Issuer and to examine their respective books of record and corporate books and discuss their respective affairs, finances and accounts and (y) the Company to conduct, at the Investor’s expense, an audit of the corporate books of the Issuer and the Investor relating to the issuance of peat certificates at such times and with such frequency (but no less frequently than once a year unless an Event of Default has occurred and is continuing) as the Company shall reasonably require. Each of the Issuers shall provide notice to the Company at least 10 days prior to any shareholders’ meeting at which the issuance of peat certificates may be authorized, and shall provide copies, simultaneously with the provision thereof to its shareholders, of any written consent authorizing the issuance of peat certificates.

8.4Issuance of Peat Certificates. The Investor will not permit the Issuers to and the Issuer will not, without the prior written consent of the Company, issue any Peat Certificate to any third party for more then 70%, in the aggregate at any one time, of the peat located on their respective property or under their control or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract.

8.5Covenant of the Investor Regarding the Preferred Shares. The Investor hereby covenant and agree that the Investor shall not sell, assign, transfer or otherwise grant to any Other Person, any right, title or interest in or to, all or any portion of the Preferred Shares.

8.6Covenant of the Company regarding the Supervisor of Insurance. The Company intends to make an investment in Strategy Insurance of the Note (the “Further Investment”), provided that the contribution and transfer to Strategy Insurance of the Note shall be deemed by the Supervisor of Insurance of Barbados as qualified regulatory capital of Strategy Insurance, pursuant to applicable Barbados law. In connection therewith, the Company undertakes, within 60 days of the date hereof, to make application to the Supervisor of Insurance in Barbados to determine if the Further Investment by the Company into Strategy Insurance so qualifies as regulatory capital under Barbados law.

8.7Facility Activation Fee. Within ninety (90) days of the Approval Date, Strategy undertakes to pay a fee to the Investor or its designees of an amount of $2,000,000 in the event of a regulatory approval from the Supervisor of Insurance in Barbados in a manner that is reasonably acceptable to Strategy.

- 16 -

ARTICLE 9

EVENTS OF DEFAULT - REMEDIES - UNWINDING

9.1Events of Default. Any of the following shall constitute an Event of Default (each an “Event of Default”):

9.1.1Issuer Default. Any Issuer shall fail to perform or observe any covenant or agreement contained herein or in any Ancillary Agreement, to which it is a party, and such failure shall continue for 10 days after receipt from the Company of written notice thereof;

9.1.2Investor Default. The Investor shall fail to perform or observe any covenant or agreement contained herein or in any Ancillary Agreement, to which it is a party, and such failure shall continue for 10 days after receipt from the Company of written notice thereof;

9.1.3Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of a party hereto or in any Ancillary Agreement or in any document delivered in connection herewith or therewith shall be incorrect or misleading when made or deemed made;

9.1.4Invalidity of Peat Certificates - Transfer. The Peat Certificates cease to be in full force and effect; or the relevant Issuer, purports to revoke, terminate or rescind such transfer, or any third party contests in any manner the validity or enforceability of such transfer,

9.1.5Liens - Encumbrances. Any Person other than the Company attaches or institutes proceedings to attach all or any material part of the land on which the peat represented by the Peat Certificates is located, or to any Peat Certificate or peat itself or any portion thereof and any such proceeding or attachment or any judgment lien against any such land, Peat Certificate or peat remains unlifted, unstayed or undischarged for a period of 10 days;

9.1.6Peat Concessions. Any Issuer fails to renew, maintain or comply with, its respective Peat Concession, or such Peat Concession is rescinded, suspended, revoked, terminated or determined to be invalid or ceases to be in full force and effect, or either Peat Concession is materially amended, modified or supplemented without prior written consent of the Company or any proceedings are commenced by or before any Governmental Authority of Panama for the purpose of rescinding, terminating, suspending, modifying or withholding such Peat Concession, or the land subject of such Peat Concession is or becomes subject to expropriation, seizure, nationalization, confiscation or other compulsory acquisition by a Governmental Authority; or

9.1.7Change in Control. The Investor shall at any time cease to own 100% of the capital stock of each of PPSA and CPSA.

9.2Remedies Upon Event of Default. Upon the occurrence of an Event of Default, the non-defaulting party shall have all remedies, at law and equity, as are available to it, to seek monetary recompense for any and all damages, other than punitive damages, suffered thereby as a result of such Event of Default, all such remedies which shall be cumulative.

- 17 -

9.3Right to Setoff. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, whether prior to or after the occurrence of an Event of Default, the Company (or assigns) is hereby authorized at any time and from time to time, without presentment, demand, protest or other notice of any kind to the Investor, the Issuers or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply to the payment of the amounts due under this Agreement, any of the Ancillary Agreements or in respect of any shares of stock (including the Preferred Shares) issued thereby (whether matured or unmatured), any and all amounts that the Company, Strategy or Strategy Insurance is or may be obligated to pay over to the Investor (including, without limitation, against any dividend on, or amount required as payment in respect of redemption of the Preferred Shares.

9.4Unwind. In the event that the Supervisor of Insurance of Barbados determines that the Further Investment does not qualify as regulatory capital under Barbados law, the transactions contemplated by this Agreement and the Ancillary Agreements shall be unwound. In such connection, the Company shall redeem the Preferred Shares held by the Investor at an aggregate redemption price of $1.00 by delivery of written notice, as agreed herein, to the Investor and upon receipt of the Preferred Shares and the Warrant, the Company shall return the Note and the Peat Certificates to the Investor. At such time, the Note, the Security Agreement, the Warrant and the Registration Rights Agreement shall be terminated and of no force or effect.

ARTICLE 10

MISCELLANEOUS

10.1Expenses. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the party that incurs such costs and expenses, provided, however, that if the Company does not obtain the approval of the Supervisor of Insurance of Barbados of the Further Investment, the Company shall reimburse the Investor for all reasonable out-of-pocket expenses incurred in respect of the transaction contemplated hereby.

10.2Further Assurances. Subject to the terms and conditions of this Agreement, each of the parties hereto will use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement. Without limiting the foregoing, the Investor shall cooperate with any reasonable requests made by the Company, Strategy or Strategy Insurance in connection with the enforcement or defense of the Company's rights in the Peat Certificates.

10.3Survival of Warranties. The warranties, representations and covenants contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the making of the Investment, and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of any of the parties to this Agreement.

- 18 -

10.4Amendment and Modification. This Agreement may be amended, modified or supplemented only by written agreement executed by all of the parties hereto.

10.5Waiver of Compliance; Consents. Except as otherwise provided in this Agreement, any failure of any of the parties to comply with any obligation, representation, warranty, covenant, agreement or condition herein may be waived by the party entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, representation, warranty, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in this Section.

10.6Notices. All notices and other communications hereunder shall be in writing and shall be deemed given when delivered personally or by nationally recognized courier service (receipt requested) or mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

(a) If to the Company

Sagicor Corporate Centre

Wildey, St. Michael, Barbados W.I.

Attention: Lennox Gibbs

Facsimile No.: 1-246-426-6616

(b) If to Strategy International Insurance Group

200 Yorkland Blvd., Suite 710

Toronto, Ontario

Canada M2J 5C1

Attention: Louis E. Lettieri

Facsimile: 416-391-4985

In each case with a copy to.

Baker & McKenzie LLP

1114 Avenue of the Americas

New York, NY 10036

Attention: Martin E. Weisberg

Facsimile No.: 212-310-1786

- 19 -

(c) If to Grupo Lakas, S.A.:

Via Fernandez de Cordoba # 69

Panama, Rep. de Panama

Attention: Otto D. Lakas

Facsimile No.: 507-261-9719

with a copy to.

[address]

Attention.

Facsimile No.

(d) If to Panama Peat S.A.:

Via Fernandez de Cordoba # 69

Panama, Rep. de Panama

Attention: Otto D. Lakas

Facsimile No.: 507-261-9719

(e) If to Changuinola Peat S.A.:

Via Fernandez de Cordoba # 69

Panama, Rep. de Panama

Attention: Otto D. Lakas

Facsimile No.: 507-261-9719

10.7Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any party hereto without the prior written consent of each of the parties hereto, nor is this Agreement intended to confer upon any Other Person except the parties hereto any rights or remedies hereunder.

10.8Public Announcements. Except as may be required by law (including, without limitation, federal securities laws or the applicable rules of any securities exchange or securities market to which a party may be subject) or court order, each party hereto shall consult with each other before issuing any press release or otherwise making any public statement with respect to the transactions contemplated by this Agreement and shall not issue any such press release or make any such public statement that is not approved by the other parties hereto, which approval shall not be unreasonably withheld.

10.9Confidentiality. The parties hereto shall maintain in confidence, and will cause their directors, officers, employees, agents and advisors to maintain in confidence the terms and provisions of this Agreement and the transactions contemplated by this Agreement, unless (i) such information was already known to such party or to others not bound by a duty of confidentiality or such information becomes publicly available through no fault of such party, (ii) the disclosure or use of such information is necessary or appropriate in making any filing or obtaining any consent or approval required or in connection with the consummation of the transactions contemplated by this Agreement, or (iii) the furnishing or use of such information is required by law (including rules and regulations of the United States Securities and Exchange Commission), legal proceedings, or the rules of any stock exchange to which any party hereto is subject.

- 20 -

10.10Governing Law. This Agreement will be governed by the laws of the State of New York, without regard to conflicts of law rules of such State which would result in the application of the laws of another jurisdiction.

10.11Consent to Jurisdiction and Waiver of Jury Trial. Each Party hereto hereby irrevocably agrees that any suit, action, proceeding or claim against it arising out of, or relating to, this Agreement (including, without limitation, any dispute relating to the Peat Certificates, the underlying peat and the values thereof) or any judgment entered by any court in respect thereof may be brought and enforced in any State or Federal court sitting in New York, New York, and each Party hereby irrevocably submits to the jurisdiction of such courts for the purpose of any suit, action, proceeding or claims. Each Party hereby irrevocably waives, to the fullest extent allowed by law, any objection which it may now or hereafter have to the laying of venue of any suit, action, or proceeding arising out of or relating to this agreement brought in any State or Federal court sitting in New York, New York, and hereby irrevocably waives any claim that any suit, action or proceeding was brought in an inconvenient forum. Each Party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action, suit or proceeding or claim by the mailing of copies thereof by certified mail, return receipt requested, postage prepaid, to its address set forth in Section 10.6. Nothing herein shall affect the right of the Company to commence legal proceedings or otherwise proceed against the Investor or any Issuer in any jurisdiction or to serve process in any manner permitted by applicable law. Each Party waives irrevocably the right to trial by jury with respect to any legal proceeding in which the Parties are adverse parties.

10.12Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

10.13Interpretation. The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of this Agreement and shall not in any way affect the meaning or interpretation of this Agreement.

10.14Entire Agreement. This Agreement, including the Exhibits hereto, embodies the entire agreement and understanding of the parties hereto in respect of the transactions contemplated by this Agreement. All other previous documents, undertakings and agreements, whether verbal, written or otherwise, between the Parties with respect to the subject matter of this Agreement (including, without limitation, the letter from Strategy to the Investor dated October 25, 2005), are hereby cancelled and shall not affect or modify any of the terms or obligations set forth in this Agreement. The Exhibits hereto are an integral part of this Agreement and are incorporated by reference herein.

- 21 -

10.15Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction. Notwithstanding the foregoing, in the event of any such determination the effect of which is to affect materially and adversely any party, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled and consummated to the maximum extent possible.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

- 22 -

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their respective duly authorized officers as of the date first above written.

Strategy Holding Company Limited

By. /s/ Louis Lettieri

Name. Louis Lettieri

Title. Chief Financial Officer

Strategy International Insurance Group, Inc.

By. /s/ Louis Lettieri

Name. Louis Lettieri

Title. Chief Financial Officer

Grupo Lakas S.A.

By. /s/ Otto Demetrio  Lakas R.

Name. Otto Demetrio  Lakas R.

Title. President

Panama Peat S.A.

By. /s/ Alfred Sklar

Name. Alfred Sklar

Title. President

Changuinola Peat S.A.

By. /s/ Alfred Sklar

Name. Alfred Sklar

Title. President

i