Exhibit 10.1
RECAPITALIZATION AGREEMENT
among
NORTH BAY HOLDINGS LIMITED,
ENSTAR GROUP LIMITED,
KENMARE HOLDINGS LTD.,
TRIDENT V, L.P.,
TRIDENT V PARALLEL FUND, L.P.,
TRIDENT V PROFESSIONALS FUND, L.P.,
DOWLING CAPITAL PARTNERS I, L.P.,
CAPITAL CITY PARTNERS LLC,
and
STARSTONE SPECIALTY HOLDINGS LIMITED (solely for purposes of Section 4.12)
August 13, 2020

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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
5
1.1

Definitions
5

ARTICLE II CLOSING TRANSACTIONS
10
2.1

Core Distribution; Fitzwilliam Contribution
10
2.2

North Bay Dissolution and Distributions
10
2.3

Closing
11
2.4

Deliveries
11
2.5

Closing Conditions
13
2.6

North Bay Dissolution
15

ARTICLE III REPRESENTATIONS AND WARRANTIES
15
3.1

Representations and Warranties of Enstar and Kenmare
15
3.2

Representations and Warranties relating to North Bay
17
3.3

Representations and Warranties of each Trident Party
19
3.4

Representations and Warranties of the Dowling Parties
21

ARTICLE IV OTHER AGREEMENTS OF THE PARTIES
23
4.1

Confidentiality
23
4.2

Shareholders’ Agreements
23
4.3

Efforts to Consummate
24
4.4

Fees and Expenses
24
4.5

Conduct of the Business
25
4.6

Commercial Insurance
26
4.7

Separation-Related Matters
27
4.8

Certain Other Covenants.
27
4.9

D&O Liabilities.
27
4.1

Core Related Matters
28
4.11

Pre-Closing SFL Distribution
28
4.12

RemainCo Funding of Fitzwilliam Cell 31
28
4.13

Share Readjustment.
28

ARTICLE V TERMINATION
29
5.1

Optional Termination
29
5.2

Automatic Termination
29
5.3

Effect of Termination
30

Article VI MISCELLANEOUS
30
6.1

Entire Agreement
30
6.2

No Other Representations
30
6.3

Notices
30
6.4

Amendments; Waivers
31
6.5

Headings
31
6.6

Successors and Assigns
31
6.7

Governing Law
31
6.8

Survival; Several Liability
32
6.9

Execution
32
6.1

Specific Performance
32
6.11

Severability
32

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6.12

Further Assurances
32

 

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RECAPITALIZATION AGREEMENT
This Recapitalization Agreement (this “Agreement”) is dated as of August 13,
2020, by and among North Bay Holdings Limited (“North Bay”), Enstar Group
Limited (“Enstar”), Kenmare Holdings Ltd. (“Kenmare” and, together with Enstar,
each an “Enstar Party”), Trident V, L.P., Trident V Parallel Fund, L.P. and
Trident V Professionals Fund, L.P. (individually, each a “Trident Party” and,
collectively, “Trident”), Dowling Capital Partners I, L.P. and Capital City
Partners LLC (individually, each a “Dowling Party” and, collectively, “Dowling”
and, together with Trident, each a “Trident-Dowling Party”) and, solely for
purposes of Section 4.12, StarStone Specialty Holdings Limited (“RemainCo”).
Kenmare, Trident and Dowling are collectively referred to herein as the
“Shareholders.”
RECITALS
WHEREAS, the Shareholders own all of the issued and outstanding common shares,
par value $1.00 per share, of North Bay (the “North Bay Common Shares”);
WHEREAS, North Bay owns all of the issued and outstanding (i) common shares, par
value $1.00 per share, of RemainCo (the “RemainCo Common Shares”), (ii) Class 31
Non-Voting Preferred Shares, par value $1.00 per share, of Fitzwilliam Insurance
Limited (“Fitzwilliam”) (such shares, the “Class 31 Preferred Shares”), (iii)
Class 41 Non-Voting Preferred Shares, par value $1.00 per share, of Fitzwilliam
(such shares, the “Class 41 Preferred Shares”), and (iv) Class 42 Non-Voting
Preferred Shares, par value $1.00 per share, of Fitzwilliam (such shares, the
“Class 42 Preferred Shares” and, collectively with the Class 31 Preferred Shares
and the Class 41 Preferred Shares, the “Fitzwilliam Preferred Shares”);
WHEREAS, North Bay owns certain common shares, par value $1.00 per share
(“Northshore Common Shares”), of Northshore Holdings Limited (“Northshore”);
WHEREAS, North Bay is a party to that certain Stock Purchase Agreement, dated as
of June 10, 2020 (as the same may be amended or restated from time to time in
accordance with the terms thereof, the “Core Purchase Agreement”), by and among
StarStone Finance Limited (“SFL”), North Bay and Core Specialty Insurance
Holdings, Inc. (“Core”), pursuant to which SFL shall sell to Core all of the
issued and outstanding equity interests of StarStone US Holdings, Inc.
(“StarStone US”) in exchange for consideration including (i) certain shares of
common stock of Core (such shares to be issued to SFL, the “Core Common Shares”)
and (ii) the Core Cash Consideration;
WHEREAS, subject to the terms and conditions contemplated herein, following the
consummation of the transactions contemplated by the Core Purchase Agreement,
including the receipt by SFL of the Core Common Shares, the Shareholders desire
North Bay to (i) cause SFL to distribute the Core Common Shares and Core Cash
Consideration to its parent StarStone Insurance (Bermuda) Limited, and in turn
cause StarStone Insurance (Bermuda) Limited to distribute the Core Common Shares
and Core Cash Consideration to its parent Bayshore, and in turn cause Bayshore
to distribute the Core Common Shares and Core Cash Consideration to its parent
North Bay, such that immediately following such distributions (collectively, the
“Core Distribution”), North Bay will be the direct holder of the Core Common
Shares and Core Cash Consideration and (ii) contribute the Fitzwilliam Preferred
Shares held by North Bay to its subsidiary RemainCo, such that immediately
following such contribution (the “Fitzwilliam Contribution”), RemainCo will be
the direct holder of the Fitzwilliam Preferred Shares;
WHEREAS, in connection with the transactions contemplated by this Agreement, the
Shareholders desire RemainCo to commit to contribute capital to Fitzwilliam
Insurance Limited, acting in respect of its Segregated Account No. 31
(“Fitzwilliam Cell 31”), as set forth herein; and
WHEREAS, subject to the terms and conditions contemplated herein, immediately
following the Core Distribution and the Fitzwilliam Contribution, the
Shareholders desire that North Bay be dissolved and make a liquidating
distribution of its assets to the Shareholders as described herein, such that
immediately following such dissolution and subject to such adjustment as
contemplated in Section 4.13: (i) Kenmare will own (a) 98.3% of the Core Common
Shares, (b) 10.5% of the outstanding Northshore Common Shares (subject to
adjustment as set forth herein) and (c) 59.0% of the outstanding RemainCo Common
Shares; (ii) Trident will own (a) 81.0% of the outstanding Northshore Common
Shares (subject to adjustment as set forth herein) and (b) 39.3% of the
outstanding RemainCo Common Shares; (iii) Dowling will own (a) 1.7% of the Core
Common Shares, (b) 1.6% of the outstanding Northshore Common Shares, and (c)
1.7% of the outstanding RemainCo Common Shares; and (iv) RemainCo will directly
own all of the Fitzwilliam Preferred Shares.

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NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Article I
DEFINITIONS
1.1    Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings indicated in this Section 1.1:
“A&R Northshore Shareholders’ Agreement” means that certain Third Amended and
Restated Northshore Shareholders’ Agreement to be entered into by Northshore,
Kenmare, Trident, Dowling and Atrium Nominees Limited as of the Closing Date,
which shall be in the form set forth in Exhibit A.
“A&R Northshore Bye-Laws” means the Amended and Restated Bye-Laws of Northshore
to be in effect as of the Closing Date, which shall be in the form set forth in
Exhibit B.
“Action” means any civil, criminal or administrative action, suit, claim,
litigation or similar proceeding, in each case before a Governmental Authority.
“Affiliate” means, with respect to any Person, any other Person who, directly or
indirectly (including through one or more intermediaries), controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, “control,” when used with respect to any specified Person,
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person, whether through ownership of voting
securities or partnership or other ownership interests, by contract or
otherwise; and the terms “controlling” and “controlled” shall have correlative
meanings.
“Agreement” has the meaning set forth in the Preamble.
“Applicable Law” means, with respect to any Person, all provisions of Law that
apply to such Person and such Person’s activities, assets and property.
“Arden Re” means Arden Reinsurance Company Ltd.
“Atrium” means Atrium Underwriting Group Limited.
“Atrium Long Term Incentive Plan” means the annual incentive plan providing for
the grant of share awards to employees pursuant to the rules of the annual long
term incentive plan effective from April 17, 2014.
“Atrium Matching Share Plan” means the matching cash plan effective from
December 2019.
“Atrium Matching Cash Plan” means the matching cash plan effective from March
2019.
“Bayshore” means Bayshore Holdings Limited, a Bermuda exempted company now known
as StarStone Specialty Holdings Limited.
“Burdensome Condition” means a Dowling Burdensome Condition, an Enstar
Burdensome Condition or a Trident Burdensome Condition, as applicable.
“Business Day” means a day that is not a Saturday, a Sunday or any other day on
which commercial banking institutions are authorized or required by Law to be
closed for regular banking business in New York City or Hamilton, Bermuda.
“Class 31 Preferred Shares” has the meaning set forth in the Recitals.
“Class 41 Preferred Shares” has the meaning set forth in the Recitals.
“Class 42 Preferred Shares” has the meaning set forth in the Recitals.

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“Closing” means the closing of the Transaction.
“Closing Date” means the date on which the Closing occurs.
“Confidential Information” means all information of any nature and in any form,
including, in writing or orally or in a visual or electronic form or in a
magnetic or digital form, relating directly or indirectly to: (i) the provisions
of this Agreement; or (ii) the discussions and negotiations in respect of this
Agreement or the Transaction; provided, however, that “Confidential Information”
excludes any information that at the date of disclosure by or on behalf of a
party is publicly known or at any time after that date becomes publicly known,
in each case, through no fault of the party to whom such information was
disclosed.
“Core” has the meaning set forth in the Recitals.
“Core Cash Consideration” means the portion of the “Final Cash Purchase Price”
as such term is defined in the Core Purchase Agreement or, if such amount has
not been finally determined pursuant to the Core Purchase Agreement at the
Closing, the “Closing Cash Purchase Price” as such term is defined in the Core
Purchase Agreement that North Bay and its Subsidiaries are legally permitted to
distribute to the shareholders of North Bay and that North Bay does distribute
to its shareholders at the Closing as contemplated by this Agreement.
“Core Common Shares” has the meaning set forth in the Recitals.
“Core Distribution” has the meaning set forth in the Recitals.
“Core Material Adverse Effect” means any change, effect, event, occurrence,
condition, state of facts or development that, either alone or in combination,
has had, or would be reasonably expected to have, a materially adverse effect on
the business, operations, assets, liabilities or condition (financial or
otherwise) and results of operations of Core or any of its Subsidiaries, taken
as a whole, provided, that none of the following (or the results thereof), in
each case arising after the date hereof, shall constitute or be deemed to
contribute to a Core Material Adverse Effect, and otherwise shall not be taken
into account in determining whether a Core Material Adverse Effect has occurred
or would reasonably be expected to occur: any adverse change, effect, event,
occurrence, condition, state of facts or development arising out of, resulting
from or attributable to (a) the global economy generally or capital or financial
market conditions generally (including changes in interest rates or exchange
rates); (b) any occurrence or condition generally affecting participants in any
jurisdiction or geographic area in any segment of the industries or markets in
which Core or any of its Subsidiaries participates; (c) any change in GAAP, SAP
or Applicable Law, or the interpretation or enforcement thereof; (d)
hostilities, acts of war or terrorism, sabotage, military actions, or any
escalation or worsening thereof; or (e) any failure of Core or any of its
Subsidiaries to meet any financial projections or targets (provided, that this
clause (e) shall not by itself exclude the underlying causes of any such
failure); provided, that in the case of clauses (a), (b), (c) and (d) to the
extent such change or effect materially disproportionately affects Core and its
Subsidiaries relative to other companies in the industries in which Core and its
Subsidiaries operate, then the disproportionate aspect of such effect may be
taken into account in determining whether a Core Material Adverse Effect has
occurred or will occur.
“Core Purchase Agreement” has the meaning set forth in the Recitals.
“D&O Indemnified Person” has the meaning set forth in Section 4.9(a).
“Dowling” has the meaning set forth in the Preamble.
“Dowling Burdensome Condition” means the taking of any action, or any
restriction, condition or requirement, that (i) imposes any material limitations
on Dowling’s or its Affiliates’ ownership or operation of all or any material
portion of its or any of its Affiliates’ businesses, operations or assets, (ii)
compels Dowling or any of its Affiliates to sell, divest or hold separate,
before or after the Closing Date, all or any portion of Dowling’s or its
Affiliates’ businesses, operations or assets, (iii) requires Dowling or any of
its Affiliates to take any action (or agree to refrain from taking any action),
including an amendment of any Transaction Agreement or the sale, lease, license,
disposal or holding separate by Dowling or any of its Affiliates of any assets,
rights, product lines, licenses, categories of assets or business or other
operations or interests therein that would, or would reasonably be expected to,
materially adversely affect or impair the economic benefits expected to be
delivered to Dowling under the Transaction Agreements or in connection with the
consummation of the transactions contemplated thereby, (iv) requires Dowling or
any of its Affiliates to alter any agreement, change any agreement or enter into
any agreement, in each such case, that materially adversely alters

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or changes, or has or would have the effect of materially adversely changing or
altering, the economic benefits derived or expected to be derived by Dowling and
its Affiliates under the Transaction Agreements; provided, that a requirement
that Dowling or any of its Affiliates enter into any direct or indirect
guarantee, capital maintenance agreement, keep-well or other requirement to fund
money into RemainCo, Core, Northshore or any of their respective Subsidiaries
shall be a Burdensome Condition or (v) otherwise has a material adverse effect
on the business, assets, liabilities, operations or results of operations or
condition (financial or otherwise) of Dowling and its Affiliates, taken as a
whole.
“Dowling Cash Amount” has the meaning set forth in Section 2.2.
“Dowling Distributed Shares” has the meaning set forth in Section 3.4(f).
“Dowling Party” has the meaning set forth in the Preamble.
“Employee Benefit Plan” means (a) each “employee benefit plan” within the
meaning of Section 3(3) of ERISA, (b) a stock bonus, stock purchase, stock
option, restricted stock, stock appreciation right or similar equity-based plan
or (c) any other employment, consulting, change of control, collective
bargaining, severance, deferred-compensation, retirement, welfare-benefit,
bonus, incentive, fringe benefit, post-retirement health or life, tuition fund,
service award, company car, scholarship, relocation, sick pay, sick leave,
vacation, holiday, restrictive covenant and other plan, policy, program,
agreement, commitment or other arrangement, whether or not subject to ERISA
(including any related funding mechanism now in effect or required in the
future), whether formal or informal, oral or written, funded, unfunded, insured
or self-insured.
“Enstar” has the meaning set forth in the Preamble.
“Enstar Burdensome Condition” means the taking of any action, or any
restriction, condition or requirement, that (i) imposes any material limitations
on Enstar’s or its Affiliates’ ownership or operation of all or any material
portion of its or any of its Affiliates’ businesses, operations or assets, (ii)
compels Enstar or any of its Affiliates to sell, divest or hold separate, before
or after the Closing Date, all or any portion of Enstar’s or its Affiliates’
businesses, operations or assets, (iii) requires Enstar or any of its Affiliates
to take any action (or agree to refrain from taking any action), including an
amendment of any Transaction Agreement, the Core Purchase Agreement or the sale,
lease, license, disposal or holding separate by Enstar or any of its Affiliates
of any assets, rights, product lines, licenses, categories of assets or business
or other operations or interests therein that would, or would reasonably be
expected to, materially adversely affect or impair the economic benefits
expected to be delivered to Enstar under the Transaction Agreements or the Core
Purchase Agreement or in connection with the consummation of the transactions
contemplated thereby, (iv) requires Enstar or any of its Affiliates to alter any
agreement, change any agreement or enter into any agreement, in each such case,
that materially adversely alters or changes, or has or would have the effect of
materially adversely changing or altering, the economic benefits derived or
expected to be derived by Enstar and its Affiliates under the Transaction
Agreements or the Core Purchase Agreement; provided, that a requirement that
Enstar or any of its Affiliates enter into any direct or indirect guarantee,
capital maintenance agreement, keep-well or other requirement to fund money into
RemainCo, Northshore, Core or any of their respective Subsidiaries shall be a
Burdensome Condition or (v) otherwise has a material adverse effect on the
business, assets, liabilities, operations or results of operations or condition
(financial or otherwise) of (x) Enstar and its Affiliates, taken as a whole, or
(y) Core or any of its Subsidiaries.
“Enstar Entities” has the meaning set forth in Section 3.2(i)(i).
“Enstar Party” has the meaning set forth in the Preamble.
“Enstar Related Persons” has the meaning set forth in Section 3.2(i)(ii).
“Excess Dowling Cash Amount” has the meaning set forth in Section 2.2.
“Excess Trident Cash Amount” has the meaning set forth in Section 2.2.
“Fitzwilliam” has the meaning set forth in the Recitals.
“Fitzwilliam Cell 31” has the meaning set forth in the Recitals.
“Fitzwilliam Contribution” has the meaning set forth in the Recitals.

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“Fitzwilliam Dowling Amount” means the amount funded on behalf of Dowling
pursuant to the Fitzwilliam Dowling Funding Agreement, including applicable
interest on such amount.
“Fitzwilliam Dowling Funding Agreement” means that certain arrangement with
Dowling similar to the Fitzwilliam Funding Agreement, except based on Dowling’s
ownership interest in North Bay.
“Fitzwilliam Funding Agreement” means that certain Agreement, effective as of
May 5, 2020, by and among Kenmare and Trident.
“Fitzwilliam Trident Amount” means the “Trident Amount” as such term is defined
in the Fitzwilliam Funding Agreement as measured as of immediately prior to the
Closing.
“Fitzwilliam Preferred Shares” has the meaning set forth in the Recitals.
“Fundamental Representations” the representations and warranties contained in
Sections 3.1(b), 3.2(b), 3.3(b) and 3.4(b) (Authorization, Authority and
Enforceability), Section 3.2(c) (Capitalization), Section 3.2(d) (Subsidiaries)
and Sections 3.1(k), 3.2(h), 3.3(k) and 3.4(k) (Title to Shares).
“GAAP” means generally accepted accounting principles in the United States as in
effect from time to time.
“Governmental Authority” means any international, supranational or national
government, any state, provincial, local or other political subdivision thereof,
any entity, authority or body exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, including
any government authority, agency, department, board, commission, court, tribunal
or arbitrator, or any self-regulatory organization.
“Hamilton Insurance” means Hamilton Insurance Company, formerly known as Valiant
Insurance Company.
“Hamilton Specialty” means Hamilton Specialty Insurance Company, formerly known
as Valiant Specialty Insurance Company.
“Kenmare” has the meaning set forth in the Preamble.
“Kenmare Distributed Shares” has the meaning set forth in Section 3.1(f).
“Law” means any treaty, code, statute, law (including common law), rule,
regulation, convention, ordinance, order, regulatory policy statement or similar
guidance, binding directive or decree of any Governmental Authority.
“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, or preemptive right except for any lien, charge, security interest,
encumbrance, right of first refusal, or preemptive right pursuant to any
Applicable Law.
“Material Contract” means any contract filed as an exhibit to (i) Enstar’s Form
10-K for the year ended December 31, 2019, (ii) Enstar’s Form 10-Q for the
quarter ended March 31, 2020 and for the quarter ended June 30, 2020, or (iii)
Enstar’s Forms 8-K filed with the SEC on January 27, 2020, June 9, 2020, June
11, 2020 and July 17, 2020.
“Nasdaq” means the Nasdaq Global Select Market (or any successor thereto).
“North Bay” has the meaning set forth in the Preamble.
“North Bay Common Shares” has the meaning set forth in the Recitals.
“North Bay Shareholders’ Agreement” means the Voting and Shareholders’
Agreement, dated as of December 23, 2015, by and among North Bay, the
Shareholders and the other parties thereto, as amended from time to time.
“Northshore” has the meaning set forth in the Recitals.
“Northshore Common Shares” has the meaning set forth in the Recitals.
“Northshore Entities” has the meaning set forth in Section 3.2(i)(i).

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“Northshore LTIP” means, collectively, the Atrium Matching Share Plan, the
Atrium Long Term Incentive Plan, the Atrium Matching Cash Plan and the Atrium
Annual Long Term Incentive Cash Plan.
“Northshore Material Adverse Effect” means any change, effect, event,
occurrence, condition, state of facts or development that, either alone or in
combination, has had, or would be reasonably expected to have, a materially
adverse effect on the business, operations, assets, liabilities or condition
(financial or otherwise) and results of operations of Northshore or any of its
Subsidiaries, taken as a whole, provided, that none of the following (or the
results thereof), in each case arising after the date hereof, shall constitute
or be deemed to contribute to a Northshore Material Adverse Effect, and
otherwise shall not be taken into account in determining whether a Northshore
Material Adverse Effect has occurred or would reasonably be expected to occur:
any adverse change, effect, event, occurrence, condition, state of facts or
development arising out of, resulting from or attributable to (a) the global
economy generally or capital or financial market conditions generally (including
changes in interest rates or exchange rates); (b) any occurrence or condition
generally affecting participants in any jurisdiction or geographic area in any
segment of the industries or markets in which Northshore or any of its
Subsidiaries participates; (c) any change in GAAP, SAP or Applicable Law, or the
interpretation or enforcement thereof; (d) hostilities, acts of war or
terrorism, sabotage, military actions, or any escalation or worsening thereof;
or (e) any failure of Northshore or any of its Subsidiaries to meet any
financial projections or targets (provided, that this clause (e) shall not by
itself exclude the underlying causes of any such failure); provided, that in the
case of clauses (a), (b), (c) and (d) to the extent such change or effect
materially disproportionately affects Northshore and its Subsidiaries relative
to other companies in the industries in which Northshore and its Subsidiaries
operate, then the disproportionate aspect of such effect may be taken into
account in determining whether a Northshore Material Adverse Effect has occurred
or will occur.
“Northshore Shared Service Functions and Assets” has the meaning set forth in
Section 3.2(i)(iii).
“Northshore Shareholders’ Agreement” means the Second Amended and Restated
Shareholders’ Agreement of Northshore Holdings Limited, dated as of December 23,
2015, between Northshore, North Bay and Atrium Nominees Limited, as amended from
time to time.
“Organizational Documents” has the meaning set forth in Section 3.2(d)(iii).
“Percentage Ownership” means, with a respect to a shareholder of North Bay, the
number of common shares of North Bay held by such shareholder divided by the
total number of common shares of North Bay then outstanding.
“Permit” means any consent, franchise, license, approval, authorization,
registration, certificate, certification or permit issued or granted by any
Governmental Authority.
“Person” means any individual, partnership, firm, corporation, association,
trust, unincorporated organization, joint venture, limited liability company,
limited partnership or other entity.
“Quota Share Reinsurance Contracts” means, together, the following agreements
(as such agreements have been amended): (a) that certain Quota Share Reinsurance
Contract - (A) Retrospective Cover, dated as of June 10, 2014, by and among
Fitzwilliam Cell 31, StarStone Insurance (Bermuda) Limited (formerly known as
“Torus Insurance (Bermuda) Limited”), Enstar and Trident and (b) that certain
Quota Share Reinsurance Contract - (B) Prospective Cover, dated as of June 10,
2014, by and among Fitzwilliam Cell 31, StarStone Insurance (Bermuda) Limited
(formerly known as “Torus Insurance (Bermuda) Limited”), Enstar and Trident.
“RemainCo” has the meaning set forth in the Preamble.
“RemainCo Common Shares” has the meaning set forth in the Recitals.
“RemainCo Bye-Laws” means the Bye-Laws of RemainCo to be in effect as of the
Closing Date, which shall be in the form set forth in Exhibit C.
“RemainCo Shareholders’ Agreement” means that certain Voting and Shareholders’
Agreement to be entered into by Kenmare, Trident, Dowling and RemainCo as of the
Closing Date, which shall be in the form set forth in Exhibit D.
“Restricted Period” means a period commencing on the Closing Date and ending
three (3) years thereafter.

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“SAP” means, as to any regulated insurance company, the statutory accounting
practices and procedures prescribed or permitted by the applicable insurance
regulator in the jurisdiction in which such company is domiciled.
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
“SFL” has the meaning set forth in the Recitals.
“Shareholders” has the meaning set forth in the Preamble.
“StarStone US” has the meaning set forth in the Recitals.
“Subsidiary” of any Person means another Person in which such first Person (a)
owns, directly or indirectly, fifty percent (50%) or more of the outstanding
voting securities, equity securities, profits interest or capital interest or
(b) is entitled to elect at least a majority of the board of directors or other
persons performing similar functions.
“Transaction” means, collectively, the transactions contemplated by this
Agreement.
“Transaction Agreements” means, collectively, this Agreement and the other
agreements to be entered into pursuant to this Agreement.
“Transition Services Agreement” means that certain transition services agreement
to be entered into by Enstar (or an Affiliate thereof) and Northshore as of the
Closing Date, which shall be in the form set forth in Exhibit E.
“Trident” has the meaning set forth in the Preamble.
“Trident Burdensome Condition” means the taking of any action, or any
restriction, condition or requirement, that (i) imposes any material limitations
on Trident or its Affiliates’ ownership or operation of all or any material
portion of its or any of its Affiliates’ businesses, operations or assets, (ii)
compels Trident or any of its Affiliates to sell, divest or hold separate,
before or after the Closing Date, (x) all or any portion of Trident’s or its
Affiliates’ businesses, operations or assets or (y) all or any portion of the
business, operations or assets of Northshore or any of its Subsidiaries, (iii)
requires Trident or any of its Affiliates to take any action (or agree to
refrain from taking any action), including an amendment of any Transaction
Agreement or the sale, lease, license, disposal or holding separate by
Northshore or any of its Subsidiaries or by Trident or any of its Affiliates of
any assets, rights, product lines, licenses, categories of assets or business or
other operations or interests therein that would, or would reasonably be
expected to, materially adversely affect or impair the economic benefits
expected to be delivered to Trident under the Transaction Agreements or in
connection with the consummation of the transactions contemplated thereby, (iv)
requires Trident or any of its Affiliates to alter any agreement, change any
agreement or enter into any agreement, in each such case, that materially
adversely alters or changes, or has or would have the effect of materially
adversely changing or altering, the economic benefits derived or expected to be
derived by Trident and its Affiliates under the Transaction Agreements;
provided, that a requirement that Trident or any of its Affiliates enter into
any direct or indirect guarantee, capital maintenance agreement, keep-well or
other requirement to fund money into RemainCo, Core, Northshore or any of their
respective Subsidiaries shall be a Burdensome Condition or (v) otherwise have a
material adverse effect on the business, assets, liabilities, operations or
results of operations or condition (financial or otherwise) of (x) Trident and
its Affiliates, taken as a whole, or (y) Northshore or any of its Subsidiaries.
“Trident Cash Amount” has the meaning set forth in Section 2.2.
“Trident Distributed Shares” has the meaning set forth in Section 3.3(f).
“Trident Party” has the meaning set forth in the Preamble.
“Trident-Dowling Party” has the meaning set forth in the Preamble.
“Valiant Treaty” means collectively (i) the Reinsurance Agreement, dated as of
October 1, 2007, entered into by and between Hamilton Insurance, as the
“Company”, and Arden Re, as the “Reinsurer”, (ii) the Reinsurance Agreement,
dated as of November 25, 2008, entered into by and between Hamilton Specialty,
as the “Company”, and 

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Arden Re, as the “Reinsurer” and (iii) the Excess of Loss Reinsurance Agreement,
made as of November 5, 2010, among Hamilton Insurance and Hamilton Specialty,
collectively as the “Company” and Arden Re, as the “Reinsurer.”
Article II
CLOSING TRANSACTIONS
2.1    Core Distribution; Fitzwilliam Contribution. Subject to the term and
conditions set forth herein, at the Closing:
(a)    North Bay shall effect the Core Distribution, such that immediately
following the Core Distribution, North Bay shall directly own the Core Common
Shares (representing all of the Core shares received by SFL pursuant to the
terms of the Core Purchase Agreement) and the Core Cash Consideration; and
(b)    North Bay shall effect the Fitzwilliam Contribution, such that
immediately following the Fitzwilliam Contribution, RemainCo shall directly own
all of the Fitzwilliam Preferred Shares.
2.2    North Bay Dissolution and Distributions. Subject to the terms and
conditions set forth herein and, with respect to the following clauses (ii)
through (v), Applicable Law and the receipt of any required regulatory approval,
at the Closing, immediately following the Core Distribution and the Fitzwilliam
Contribution, North Bay and the Shareholders shall effectuate the liquidation,
winding-up and dissolution of North Bay in accordance with the procedures
required by the Companies Act 1981 and other Applicable Law and North Bay shall
make a liquidating distribution of: (i) the Core Common Shares, the RemainCo
Common Shares and the Northshore Common Shares held by it to the Shareholders in
the respective amounts set forth opposite such Shareholder’s name on Schedule I
attached hereto, subject to adjustment as provided for in Section 4.13; (ii)
either (A) if the product of the Core Cash Consideration multiplied by Trident’s
Percentage Ownership of North Bay as of immediately prior to Closing (the
“Trident Cash Amount”) is equal to or greater than the Fitzwilliam Trident
Amount (such excess amount, the “Excess Trident Cash Amount”), cash in an amount
equal to the Fitzwilliam Trident Amount to Kenmare in full satisfaction of
Trident’s obligations under the Fitzwilliam Funding Agreement (and reducing the
“Trident Amount” thereunder to $0.00) or (B) if the Trident Cash Amount is less
than the Fitzwilliam Trident Amount, cash in an amount equal to the Trident Cash
Amount to Kenmare (and reducing the “Trident Amount” under the Fitzwilliam
Funding Agreement by such amount); (iii) either (A) if the product of the Core
Cash Consideration multiplied by Dowling’s Percentage Ownership of North Bay as
of immediately prior to Closing (the “Dowling Cash Amount”) is equal to or
greater than the Fitzwilliam Dowling Amount (such excess amount, the “Excess
Dowling Cash Amount”), cash in an amount equal to the Fitzwilliam Dowling Amount
to Kenmare in full satisfaction of Dowling’s obligations under the Fitzwilliam
Dowling Funding Agreement (and reducing the Fitzwilliam Dowling Amount
thereunder to $0.00) or (B) if the Dowling Cash Amount is less than the
Fitzwilliam Dowling Amount, cash in an amount equal to the Dowling Cash Amount
to Kenmare (and reducing the Fitzwilliam Dowling Amount by such amount); (iv) in
addition to the cash amount distributed to Kenmare under clause (ii) and (iii),
if any, (A) cash in an amount equal to the product of the Core Cash
Consideration multiplied by Kenmare’s Percentage Ownership of North Bay as of
immediately prior to Closing, plus (B) cash in an amount equal to the Excess
Trident Cash Amount, if any, to Kenmare and (v) cash in an amount equal to the
Excess Dowling Cash Amount, if any, to Dowling.
2.3    Closing. The Closing shall occur promptly (and in any event within three
Business Days) following the satisfaction of the conditions set forth in Section
2.5. The Closing shall occur remotely or at the offices of Hogan Lovells US LLP,
1735 Market Street, Suite 2300, Philadelphia, PA 19103, or such other location
as the parties shall mutually agree.
2.4    Deliveries.
(a)    Kenmare Deliveries. On the Closing Date, Kenmare or Enstar (as
applicable) shall deliver or cause to be delivered to each Trident-Dowling Party
(as applicable):
(i)    letters of resignation from each representative of Kenmare or Enstar
serving on the Board of Directors (or similar governing body) of Northshore or
any Subsidiaries of Northshore, in each case, other than as permitted in the A&R
Northshore Shareholders’ Agreement;

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(ii)    a counterpart to the Transition Services Agreement duly executed by
Enstar or the Affiliate thereof to be a party thereto;
(iii)    a counterpart to the RemainCo Shareholders’ Agreement duly executed by
Kenmare;
(iv)    a counterpart to the A&R Northshore Shareholders’ Agreement duly
executed by Kenmare;
(v)    a copy of the joinder agreement to the Core shareholders agreement duly
executed by Kenmare, the original of which Kenmare shall have delivered to Core;
(vi)    a copy of the guarantee executed by Kenmare (or Enstar or another
wholly-owned Subsidiary of Enstar) to Core pursuant to Section 7.4 of the Core
Purchase Agreement; and
(vii)    such other documents relating to the Transaction as any Trident-Dowling
Party or their respective counsel may reasonably request.
(b)    North Bay Deliveries. On the Closing Date, North Bay shall deliver or
cause to be delivered to Kenmare and each Trident-Dowling Party (as applicable)
or, in the case of clause (iii), RemainCo:
(i)    evidence reasonably satisfactory to Enstar, Dowling, and Trident
reflecting the Core Distribution;
(ii)    to Kenmare and Dowling, stock certificate(s) for the number of Core
Common Shares set forth opposite such Person’s name on Schedule I attached
hereto duly endorsed in blank or accompanied by stock powers duly executed in
blank, or another instrument of transfer in form and substance reasonably
satisfactory to Kenmare;
(iii)    to RemainCo, stock certificate(s) for the Fitzwilliam Preferred Shares
duly endorsed in blank or accompanied by stock powers duly executed in blank, or
another instrument of transfer in form and substance reasonably satisfactory to
RemainCo;
(iv)    to each Shareholder, stock certificate(s) for the Northshore Common
Shares and RemainCo Common Shares, in the respective amounts set forth opposite
such Shareholder’s name on Schedule I hereto, subject to adjustment as set forth
in Section 4.13, duly endorsed in blank or accompanied by stock powers duly
executed in blank, or another instrument of transfer in form and substance
reasonably satisfactory to each Shareholder;
(v)    to Kenmare, by wire transfer of immediately available funds in accordance
with the wire instructions provided to North Bay by Kenmare, the aggregate cash
amount payable pursuant to Section 2.2(ii), Section 2.2(iii) and Section
2.2(iv);
(vi)    to Dowling, by wire transfer of immediately available funds in
accordance with the wire instructions provided to North Bay by Dowling, the
aggregate cash amount payable pursuant to Section 2.2(v);
(vii)    a counterpart to the Transition Services Agreement duly executed by
Northshore;
(viii)    a counterpart to the A&R Northshore Shareholders’ Agreement duly
executed by Northshore and Atrium Nominees Limited;
(ix)    a counterpart to the RemainCo Shareholders’ Agreement duly executed by
RemainCo;
(x)    resolutions of the Board of Directors (or similar governing body) and
shareholders of North Bay approving the Transaction;
(xi)    evidence reasonably satisfactory to Trident that the A&R Northshore
Bye-Laws are in effect as of the Closing Date;

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(xii)    evidence reasonably satisfactory to Trident that the RemainCo Bye-Laws
are in effect as of the Closing Date; and
(xiii)    such other documents relating to the Transaction as any Enstar Party,
Trident-Dowling Party or their respective counsel may reasonably request.
(c)     Trident-Dowling Party Deliveries. On the Closing Date, each
Trident-Dowling Party, as applicable, shall deliver or cause to be delivered to
Kenmare:
(i)    a counterpart to the RemainCo Shareholders’ Agreement duly executed by
such Trident-Dowling Party;
(ii)    a counterpart to the A&R Northshore Shareholders’ Agreement duly
executed by such Trident-Dowling Party;
(iii)    in the case of Dowling, a copy of the joinder agreement to the Core
shareholders agreement duly executed by each Dowling Party, the original of
which each Dowling Party shall have delivered to Core; and
(iv)    such other documents relating to the Transaction as either Enstar Party
or its counsel may reasonably request.
2.5    Closing Conditions.
(a)    The obligations of each Enstar Party hereunder in connection with the
Closing are subject to satisfaction or waiver by each Enstar Party of the
following conditions (provided that, with respect to the conditions in Sections
2.5(a)(i)-(iv) that relate to North Bay, the determination of the satisfaction
or waiver of such conditions shall be made solely by Trident):
(i)    the accuracy in all material respects (or, in the case of the Fundamental
Representations, in all respects) on the Closing Date of the representations and
warranties of North Bay and each Trident-Dowling Party contained herein;
(ii)    all obligations, covenants and agreements of North Bay and each
Trident-Dowling Party under this Agreement required to be performed at or prior
to the Closing Date shall have been performed in all material respects;
(iii)    each Enstar Party shall have received a certificate from, and duly
executed by an authorized officer of, each of North Bay, Trident and Dowling
dated as of the Closing Date that each of the conditions set forth in Sections
2.5(a)(i) and 2.5(a)(ii) (as applicable to each such party) have been satisfied;
(iv)    the delivery by North Bay and each Trident-Dowling Party of the items
set forth in Sections 2.4(b) and 2.4(c), respectively;
(v)    receipt by Kenmare of the approvals from the applicable regulators in the
jurisdictions set forth on Exhibit F hereto to effect the Transaction without
the imposition of an Enstar Burdensome Condition;
(vi)    receipt by North Bay of the approvals from the applicable regulators in
the jurisdictions set forth on Exhibit G hereto to effect the Transaction
without the imposition of an Enstar Burdensome Condition;
(vii)    receipt by each applicable Trident-Dowling Party of the approvals from
the applicable regulators in the jurisdictions set forth on Exhibit H hereto to
effect the Transaction without the imposition of an Enstar Burdensome Condition;
(viii)    receipt by Enstar, Kenmare and their Affiliates of any consent or
approval from the Persons set forth on Exhibit I hereto to effect the
Transaction;

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(ix)    there shall not have occurred a Core Material Adverse Effect since the
consummation of the transactions contemplated by the Core Purchase Agreement;
and
(x)    the transactions contemplated by the Core Purchase Agreement shall have
been consummated, including the delivery of the Core Common Shares to SFL as
contemplated thereunder.
(b)    The obligations of North Bay hereunder in connection with the Closing are
subject to the satisfaction or waiver by North Bay of the following conditions
(provided that, with respect to the conditions in Sections 2.5(b)(i)-(iv) that
relate to each Enstar Party, the determination of the satisfaction or waiver of
such conditions shall be made solely by Trident):
(i)     the accuracy in all material respects (or, in the case of the
Fundamental Representations, in all respects) on the Closing Date of the
representations and warranties of each Enstar Party and each Trident-Dowling
Party contained herein;
(ii)    all obligations, covenants and agreements of each Enstar Party and each
Trident-Dowling Party under this Agreement required to be performed at or prior
to the Closing Date shall have been performed in all material respects;
(iii)     North Bay shall have received a certificate from, and duly executed by
an authorized officer of, each of Enstar, Kenmare, Trident and Dowling dated as
of the Closing Date that each of the conditions set forth in Sections 2.5(b)(i)
and 2.5(b)(ii) (as applicable to each such party) have been satisfied;
(iv)    the delivery by Kenmare and each Trident-Dowling Party of the items set
forth in Sections 2.4(a) and 2.4(c), respectively;
(v)    receipt by Kenmare of the approvals from the applicable regulators in the
jurisdictions set forth on Exhibit F hereto to effect the Transaction;
(vi)     receipt by North Bay of the approvals from the applicable regulators in
the jurisdictions set forth on Exhibit G hereto to effect the Transaction;
(vii)    receipt by each applicable Trident-Dowling Party of the approvals from
the applicable regulators in the jurisdictions set forth on Exhibit H hereto to
effect the Transaction;
(viii)     receipt by North Bay and its Subsidiaries of any consent or approval
from the Persons set forth on Exhibit I hereto to effect the Transaction; and
(ix)    the transactions contemplated by the Core Purchase Agreement shall have
been consummated, including the delivery of the Core Common Shares to SFL as
contemplated thereunder.
(c)    The respective obligations of each Trident-Dowling Party hereunder in
connection with the Closing are subject to the satisfaction (as determined by
Trident or Dowling, as applicable) or waiver by Trident or Dowling, as
applicable, of the following conditions:
(i)    the accuracy in all material respects (or, in the case of the Fundamental
Representations, in all respects) on the Closing Date of the representations and
warranties of each Enstar Party, North Bay, each Trident Party (with respect to
the obligations of Dowling hereunder) and Dowling (with respect to the
obligations of each Trident Party hereunder) contained herein;
(ii)    all obligations, covenants and agreements of each Enstar Party, North
Bay, each Trident Party (with respect to the obligations of Dowling hereunder)
and Dowling (with respect to the obligations of each Trident Party hereunder)
under this Agreement required to be performed at or prior to the Closing Date
shall have been performed in all material respects;
(iii)    (A) each Trident-Dowling Party shall have received a certificate from,
and duly executed by an authorized officer of, each of Enstar, Kenmare and North
Bay, dated as of the Closing Date that each of the conditions set forth in
Sections 2.5(c)(i) and 2.5(c)(ii) (as applicable to each such

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party) have been satisfied, (B) with respect to the obligations of each Trident
Party hereunder, such Trident Party shall have received a certificate from, and
duly executed by an authorized officer of, Dowling dated as of the Closing Date
that each of the conditions set forth in Sections 2.5(c)(i) and 2.5(c)(ii) (as
applicable to Dowling) have been satisfied and (C) with respect to the
obligations of Dowling hereunder, Dowling shall have received a certificate
from, and duly executed by an authorized officer of each Trident Party dated as
of the Closing Date that each of the conditions set forth in Sections 2.5(c)(i)
and 2.5(c)(ii) (as applicable to each such Trident Party) have been satisfied;
(iv)    the delivery by Kenmare and North Bay of the items set forth in Sections
2.4(a) and 2.4(b), respectively;
(v)    receipt by Kenmare of the approvals from the applicable regulators in the
jurisdictions set forth on Exhibit F hereto to effect the Transaction without
the imposition of a Trident Burdensome Condition (with respect to the
obligations of each Trident Party hereunder) or a Dowling Burdensome Condition
(with respect to the obligations of Dowling hereunder);
(vi)    receipt by North Bay of the approvals from the applicable regulators in
the jurisdictions set forth on Exhibit G hereto to effect the Transaction
without the imposition of a Trident Burdensome Condition (with respect to the
obligations of each Trident Party hereunder) or a Dowling Burdensome Condition
(with respect to the obligations of Dowling hereunder);
(vii)    receipt by each applicable Trident-Dowling Party of the approvals from
the applicable regulators in the jurisdictions set forth on Exhibit H hereto to
effect the Transaction without the imposition of a Trident Burdensome Condition
(with respect to the obligations of each Trident Party hereunder) or a Dowling
Burdensome Condition (with respect to the obligations of Dowling hereunder);
(viii)    receipt by the Trident-Dowling Parties and their Affiliates of any
consent or approval from the Persons set forth on Exhibit I hereto to effect the
Transaction;
(ix)    there shall not have occurred a Northshore Material Adverse Effect since
the date of this Agreement; and
(x)    the transactions contemplated by the Core Purchase Agreement shall have
been consummated, including the delivery of the Core Common Shares to SFL as
contemplated thereunder.
2.6    North Bay Dissolution. As contemplated by this Agreement and in
connection with the Transaction, Enstar shall cause North Bay to be dissolved in
accordance with Applicable Law. The Shareholders shall cause Enstar or its
designee to be appointed as the “liquidator” of North Bay under Applicable Law
for purposes of such dissolution and shall take such actions as are reasonably
necessary in connection with such dissolution.
Article III
REPRESENTATIONS AND WARRANTIES
3.1    Representations and Warranties of Enstar and Kenmare. Each Enstar Party
hereby represents and warrants as of the date hereof and as of the Closing Date
to each other party hereto as follows:
(a)    Existence; Good Standing. Such Enstar Party has been duly organized and
is validly existing as an exempted company in good standing under the Laws of
Bermuda and has all requisite power and authority to own and operate its
properties and to conduct its business as conducted as of the date hereof.
(b)    Authorization, Authority and Enforceability. This Agreement and each
other Transaction Agreement to which such Enstar Party is party has been duly
authorized, executed and delivered by such Enstar Party. Such Enstar Party has
full right, power and authority to enter into and perform its obligations under
this Agreement and such other Transaction Agreements. Assuming the due
authorization, execution and delivery of this Agreement and each such other
Transaction Agreement by the other parties hereto and thereto, this Agreement
and each such other Transaction Agreement constitute legal, valid and binding
obligations of such Enstar Party enforceable against such Enstar Party in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency,

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reorganization, moratorium, or similar Laws relating to or limiting creditors’
rights generally. No vote of Enstar’s equityholders is required to approve this
Agreement or the other Transaction Agreements or for the Enstar Parties to
consummate the transactions contemplated hereby and thereby.
(c)    No Conflict. The execution, delivery and performance by such Enstar Party
of this Agreement and the other Transaction Agreements to which such Enstar
Party is a party do not and will not, assuming the accuracy of the
representations and warranties of the other parties contained herein and the
approval of the applicable regulator(s) in the jurisdictions set forth on
Exhibit F hereto and after giving effect to the terms and conditions of this
Agreement, (i) violate any provision of any Law or Permit applicable to such
Enstar Party, (ii) result in a violation or breach of any provision of the
Organizational Documents of such Enstar Party, or (iii) require any consent,
approval or notice (other than those previously obtained or given or as set
forth on Exhibit I hereto) under or result in a violation or breach of or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under any
Material Contract, with respect to Enstar, or any material contract to which
Kenmare is a party, with respect to Kenmare, except in the case of clauses (i)
and (iii) where any such violation, default, breach, termination, cancellation,
failure to receive consent or approval or give notice, or acceleration would
not, individually or in the aggregate, reasonably be expected to adversely
impact the Transaction.
(d)    Consents. No consent, approval or authorization of, or declaration or
filing with, or notice to, any Governmental Authority is required by or with
respect to either Enstar Party in connection with the execution and delivery of
this Agreement and the other Transaction Agreements by either Enstar Party, or
the consummation by either Enstar Party of the transactions contemplated hereby
and thereby, except for the approvals, filings and notices set forth on Exhibit
F hereto and such other consents, approvals, authorizations, declarations,
filings or notices that if not obtained or made would not, individually or in
the aggregate, reasonably be expected to adversely impact the Transaction.
(e)    Brokers. There is no broker, finder or other party that is entitled to
receive from such Enstar Party any brokerage or finder’s fee or other fee or
commission as a result of any of the transactions contemplated by this
Agreement.
(f)    Investment Representations. Kenmare understands that the Northshore
Common Shares, the RemainCo Common Shares and the Core Common Shares to be
received by it pursuant to the terms hereof (collectively, the “Kenmare
Distributed Shares”) are “restricted securities” and have not been registered
under the Securities Act or any other applicable securities Laws. Kenmare also
understands that the Kenmare Distributed Shares are being issued or transferred
(as applicable) pursuant to exemptions from registration contained in the
Securities Act and other applicable securities Laws based in part upon Kenmare’s
representations contained in this Agreement and that the Kenmare Distributed
Shares must continue to be held by Kenmare unless a subsequent disposition
thereof is registered under the Securities Act and any other applicable
securities Laws or is exempt from such registration. Kenmare further understands
that a legend will be placed on any certificate or certificates evidencing any
of the Kenmare Distributed Shares stating that such shares have not been
registered under the Securities Act or any other applicable securities Laws and
such shares are subject to restrictions on transferability and sale.
(g)    Investment Purpose. Except as set forth in this Agreement, Kenmare is
acquiring the Kenmare Distributed Shares for its own account solely for the
purpose of investment or to effect the Transaction, not as nominee or agent, and
not with a view to, or for sale in connection with, any distribution of such
shares, and, except as set forth in this Agreement, Kenmare has no present
intention of selling, granting any participation in, or otherwise distributing
the same, in violation of the Securities Act or any other applicable securities
Laws. Except as set forth in this Agreement, Kenmare has no present agreement,
undertaking, arrangement, obligation or commitment providing for the disposition
of any of the Kenmare Distributed Shares.
(h)    Shareholder Status. Kenmare is either (i) an “accredited investor” as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act or
(ii) a “qualified institutional Buyer” as defined in Rule 144A(a) under the
Securities Act.
(i)    Economic Risk. Kenmare has sufficient knowledge, sophistication and
experience in financial and business matters so as to be able to evaluate the
risks and merits of its investment in Northshore, RemainCo and Core. Kenmare’s
financial condition is such that it is able to bear the risk of (i) holding the
Kenmare

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Distributed Shares for an indefinite period of time and (ii) loss of its entire
investment in the Kenmare Distributed Shares.
(j)    Access to Information. Kenmare acknowledges that it has been afforded
(i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of North Bay and its Affiliates concerning
the terms and conditions of the Transaction and the merits and risks of
investing in the Kenmare Distributed Shares; (ii) access to information about
Northshore, RemainCo, Core and their respective Subsidiaries and their
respective financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its investment; and
(iii) the opportunity to obtain such additional information that North Bay and
its Affiliates possess or can acquire without unreasonable effort or expense
that is necessary to make an informed investment decision with respect to the
applicable Kenmare Distributed Shares. Kenmare acknowledges that (i) the value
of the distributions to be made under this Agreement represents a negotiated
price between sophisticated parties and (ii) no representation or warranty as to
the current or future fair market value of any of the Kenmare Distributed Shares
has been made by North Bay or any of its Affiliates or by any Trident-Dowling
Party.
(k)    Title to Shares. Kenmare is the record owner (legally and beneficially)
of the North Bay Common Shares as indicated on Schedule I attached hereto, which
are held free and clear of all Liens, except as set forth in the North Bay
Shareholders’ Agreement or the Organizational Documents of North Bay.
3.2    Representations and Warranties relating to North Bay. Enstar hereby
represents and warrants as of the date hereof and as of the Closing Date to each
other party hereto as follows:
(a)    Existence; Good Standing. North Bay has been duly organized and is
validly existing as an exempted company in good standing under the Laws of
Bermuda and has all requisite power and authority to own and operate its
properties and to conduct its business as conducted as of the date hereof.
(b)    Authorization, Authority and Enforceability. This Agreement, the Core
Purchase Agreement and each other Transaction Agreement to which North Bay or
any of its Subsidiaries is a party has been duly authorized, executed and
delivered by North Bay or such Subsidiary. North Bay or such Subsidiary has full
right, power and authority to enter into and perform its obligations under this
Agreement, the Core Purchase Agreement and such other Transaction Agreements.
Assuming the due authorization, execution and delivery of this Agreement, the
Core Purchase Agreement and such other Transaction Agreements by the other
parties hereto and thereto, this Agreement, the Core Purchase Agreement and each
such other Transaction Agreement constitute legal, valid and binding obligations
of North Bay or such Subsidiary enforceable against North Bay or such Subsidiary
in accordance with their respective terms, except as enforcement may be limited
by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar Laws relating to or limiting creditors’ rights generally.
(c)    Capitalization. The authorized share capital of North Bay as of the date
hereof consists of 50,000 common shares, par value $1.00 per share, of which
9,756.892 are issued and outstanding as of the date hereof. All of the
outstanding North Bay Common Shares were duly authorized and validly issued and
are fully paid and non-assessable, and are not subject to any preemptive rights,
rights of first refusal or similar rights. Section 3.2(c) of the Disclosure
Schedule sets forth a complete list of the issued and outstanding North Bay
Common Shares as of the date hereof, including the name of the holder thereof
and the number of common shares held by such holder.
(d)    Subsidiaries.
(i)    Section 3.2(d)(i) of the Disclosure Schedule sets forth a complete list
of the issued and outstanding capital stock of each Subsidiary of North Bay as
of the date hereof, including its name, place of incorporation or formation, the
amount of its authorized capital stock and the record ownership as of the date
hereof of all issued and outstanding capital stock or other equity interests
issued thereby. All of the outstanding shares of capital stock of each
Subsidiary of North Bay were duly authorized and validly issued and are fully
paid and non-assessable and are not subject to any preemptive rights.
(ii)    Other than as set forth in the certificate of incorporation and bylaws
(or other organizational documents) or shareholders agreement, each as amended
to the date hereof (collectively, the “Organizational Documents”), of Northshore
and Bayshore, there are no restrictions

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upon the voting or transfer of the issued and outstanding shares of capital
stock of any Subsidiary of North Bay or any agreement to which such Subsidiary
is a party. Except for the Core Purchase Agreement, there are no securities,
options, warrants, rights, commitments or agreements of any kind to which any
Subsidiary of North Bay is a party or by which it is bound obligating it to
issue, sell or deliver shares of capital stock or other equity interests of such
Subsidiary. There are no outstanding bonds, debentures, notes or other
indebtedness of any Subsidiary of North Bay granting the holder thereof the
right to vote on any matters on which equityholders of such company may vote.
(iii)    Each of the Subsidiaries identified on Section 3.2(d)(i) of the
Disclosure Schedule is duly organized, validly existing and in good standing
under the Applicable Laws of the jurisdiction of its incorporation or
organization, has all requisite corporate, or other legal entity, as the case
may be, power and authority to own, lease and otherwise hold the assets and
properties owned, leased or otherwise held by it and to carry on its business as
now conducted, except in each such case where the failure to have such power or
authority would not reasonably be expected, individually or in the aggregate, to
be material to North Bay and its Subsidiaries, taken as a whole. Each Subsidiary
of North Bay is duly qualified as a foreign corporation to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification
necessary, other than in such jurisdiction where the failure to be so qualified
or in good standing (individually or in the aggregate) would not reasonably be
expected, individually or in the aggregate, to be material to North Bay and its
Subsidiaries, taken as a whole. Neither North Bay nor any of its Subsidiaries
owns or holds the right to acquire any stock, partnership interest or joint
venture interest or other equity ownership interest in any other corporation,
organization or entity, except for any other Subsidiary or investment assets
held in the ordinary course of business.
(e)    No Conflict. The execution, delivery and performance by North Bay or any
of its applicable Subsidiaries of this Agreement, the Core Purchase Agreement or
the other Transaction Agreements do not and will not, assuming the accuracy of
the representations and warranties of the other parties contained herein or
therein and the approval of the applicable regulator(s) in the jurisdictions set
forth on Exhibit G hereto (or, with respect to the transactions contemplated by
the Core Purchase Agreement, the Required Regulatory Approvals (as defined
therein)) and after giving effect to the terms and conditions of this Agreement
and the Core Purchase Agreement, (i) violate any provision of any Law or Permit
applicable to North Bay or any of its Subsidiaries, (ii) result in a violation
or breach of any provision of the Organizational Documents of North Bay or any
of its Subsidiaries, or (iii) require any consent, approval or notice (other
than those previously obtained or given or as set forth on Exhibit I hereto)
under or result in a violation or breach of or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under any material contract to which
North Bay or any of its Subsidiaries is a party (including the Core Purchase
Agreement and any agreement that has been or will be entered into in connection
therewith, including any Core shareholders agreement), except in the case of
clauses (i) and (iii) where any such violation, default, breach, termination,
cancellation, failure to receive consent or approval or give notice, or
acceleration would not, individually or in the aggregate, reasonably be expected
to adversely impact the Transaction. North Bay and SFL are in compliance with
their obligations under the Core Purchase Agreement and neither North Bay nor
any of its Subsidiaries has received notice of any default under the Core
Purchase Agreement.
(f)    Consents. No consent, approval or authorization of, or declaration or
filing with, or notice to, any Governmental Authority is required by or with
respect to North Bay or any of its Subsidiaries in connection with the execution
and delivery of this Agreement, the Core Purchase Agreement or the other
Transaction Agreements by North Bay or any of its applicable Subsidiaries, or
the consummation by North Bay or any of its Subsidiaries of the transactions
contemplated hereby or thereby, except for the approvals, filings and notices
set forth on Exhibit G hereto (or, with respect to the transactions contemplated
by the Core Purchase Agreement, the Required Regulatory Approvals (as defined
therein)) and such other consents, approvals, authorizations, declarations,
filings or notices that if not obtained or made would not, individually or in
the aggregate, reasonably be expected to adversely impact the Transaction.
(g)    Brokers. There is no broker, finder or other party that is entitled to
receive from North Bay any brokerage or finder’s fee or other fee or commission
as a result of any of the transactions contemplated by this Agreement or the
Core Purchase Agreement.
(h)    Title to Shares.  North Bay is the record owner (legally and
beneficially) of, and has good and marketable title to, 251,600 Northshore
Common Shares, all of the outstanding RemainCo Common Shares

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and all of the outstanding Fitzwilliam Preferred Shares, free and clear of all
Liens, except as set forth in the Organizational Documents of Northshore,
RemainCo or Fitzwilliam, as applicable. At the Closing after giving effect to
the consummation of the transactions contemplated by the Core Purchase
Agreement, SFL or StarStone Insurance (Bermuda) Limited will be the record owner
(legally and beneficially) of, and have good and marketable title to, all of the
Core Common Shares delivered to it pursuant to the Core Purchase Agreement, free
and clear of all Liens, except as set forth in the Organizational Documents of
Core. At the Closing, North Bay will distribute to Kenmare, Trident and Dowling
good and marketable title to the Northshore Common Shares and RemainCo Common
Shares in the amounts set forth opposite such Person’s name on Schedule I
hereto, free and clear of all Liens, except as set forth in the A&R Northshore
Shareholders’ Agreement, the RemainCo Shareholders’ Agreement or the other
Organizational Documents of Northshore or RemainCo, as applicable. At the
Closing, North Bay will distribute to Kenmare good and marketable title to the
Core Common Shares, free and clear of all Liens, except as set forth in the
Organizational Documents of Core. At the Closing, North Bay will contribute to
RemainCo good and marketable title to the Fitzwilliam Preferred Shares, free and
clear of all Liens, except as set forth in the Organizational Documents of
Fitzwilliam.
(i)    Inter-Company and Affiliated Transactions.
(i)    For purposes of this Section 3.2(i), “Northshore Entities” means
Northshore and its Subsidiaries and “Enstar Entities” means Enstar and its
Subsidiaries as of the date hereof (i.e., including North Bay, RemainCo, SFL and
its respective Subsidiaries but excluding Northshore and its Subsidiaries).
(ii)    Except as set forth on Section 3.2(i)(ii) of the Disclosure Schedule,
none of the Enstar Entities nor any current or former employee, officer or
director of any of the Enstar Entities, nor any member of his or her immediate
family, nor any of the respective Affiliates or associates of any of the
foregoing (any such Persons, collectively, “Enstar Related Persons” or, each, an
“Enstar Related Person”) (a) owes any amount to any of the Northshore Entities,
nor do any of the Northshore Entities owe any amount to any Enstar Related
Person, (b) is party to any contract with any of the Northshore Entities, (c)
owns any property or right, tangible or intangible, that is used by any of the
Northshore Entities or (d) has any claim or cause of action against any of the
Northshore Entities.
(iii)    Section 3.2(i)(iii) of the Disclosure Schedule contains a true and
complete list of (i) the services provided by the Enstar Entities or any Enstar
Related Person to the Northshore Entities that relate to, or that are material
to, the operation of the business of the Northshore Entities as of the date
hereof, (ii) all contracts to which the Enstar Entities are a party under which
the Northshore Entities receive material benefits as of the date hereof or that
are material to the operation of the Northshore Entities as of the date hereof
and (iii) all assets owned by the Enstar Entities as of the date hereof that are
material to the operation or conduct of the business of the Northshore Entities
(clauses (i) through (iii), collectively, “Northshore Shared Service Functions
and Assets”).
(j)    Sufficiency of Assets. Except for the Northshore Shared Service Functions
and Assets, none of the Enstar Entities owns any assets, properties and rights
that are currently (or have been over the course of the 12 months prior to the
date hereof) used or held for use by the business of the Northshore Entities or
provides any services to the Northshore Entities that are used in the business
of the Northshore Entities. Other than the Northshore Shared Service Functions
and Assets, the assets, properties and rights of the Northshore Entities
constitute, and will constitute after giving effect to the Closing, all of the
assets, properties and rights which are necessary for the operation of the
business of the Northshore Entities as it is presently being conducted and as it
is proposed to be conducted (and as would have been proposed to be conducted in
the absence of the transactions contemplated hereby).
3.3    Representations and Warranties of each Trident Party. Each Trident Party,
jointly and severally, hereby represents and warrants as of the date hereof and
as of the Closing Date to each other party hereto as follows:
(a)    Existence; Good Standing. Each Trident Party has been duly organized and
is validly existing as an exempted company in good standing under the Laws of
the jurisdiction of its organization or formation and has all requisite power
and authority to own and operate its properties and to conduct its business as
conducted as of the date hereof.

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(b)    Authorization, Authority and Enforceability. This Agreement and each
other Transaction Agreement to which a Trident Party is party have been duly
authorized, executed and delivered by each Trident Party. Each Trident Party has
full right, power and authority to enter into and perform its obligations under
this Agreement and such other Transaction Agreements. Assuming the due
authorization, execution and delivery of this Agreement and such other
Transaction Agreements by the other parties hereto and thereto, this Agreement
and each such other Transaction Agreement constitute legal, valid and binding
obligations of each Trident Party enforceable against each Trident Party in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar Laws relating to or limiting creditors’ rights generally.
(c)    No Conflict. The execution, delivery and performance by each Trident
Party of this Agreement and each other applicable Transaction Agreement do not
and will not, assuming the accuracy of the representations and warranties of the
other parties contained herein and the approval of the applicable regulator(s)
in the jurisdictions set forth on Exhibit H hereto and after giving effect to
the terms and conditions of this Agreement, (i) violate any provision of any Law
or Permit applicable to any Trident Party, (ii) result in a violation or breach
of any provision of the Organizational Documents of any Trident Party, or
(iii) require any consent, approval or notice (other than those previously
obtained or given or as set forth on Exhibit I hereto) under or result in a
violation or breach of or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under any material contract to which any Trident Party is a
party, except in the case of clauses (i) and (iii) where any such violation,
default, breach, termination, cancellation, failure to receive consent or
approval or give notice, or acceleration would not, individually or in the
aggregate, reasonably be expected to adversely impact the Transaction.
(d)    Consents. No consent, approval or authorization of, or declaration or
filing with, or notice to, any Governmental Authority is required by or with
respect to any Trident Party in connection with the execution and delivery of
this Agreement or the other Transaction Agreements by any Trident Party, or the
consummation by any Trident Party of the transactions contemplated hereby and
thereby, except for the approvals, filings and notices set forth on Exhibit H
hereto and such other consents, approvals, authorizations, declarations, filings
or notices that if not obtained or made would not, individually or in the
aggregate, reasonably be expected to adversely impact the Transaction.
(e)    Brokers. There is no broker, finder or other party that is entitled to
receive from any Trident Party any brokerage or finder’s fee or other fee or
commission as a result of any of the transactions contemplated by this
Agreement.
(f)    Economic Risk. Each Trident Party has sufficient knowledge,
sophistication and experience in financial and business matters so as to be able
to evaluate the risks and merits of its investment in Northshore and RemainCo.
Each Trident Party’s financial condition is such that it is able to bear the
risk of (i) holding the Northshore Common Shares and the RemainCo Common Shares
to be received by it pursuant to the terms hereof (collectively, the “Trident
Distributed Shares”) for an indefinite period of time and (ii) loss of its
entire investment in the applicable Trident Distributed Shares.
(g)    Investment Representations. Each Trident Party understands that the
applicable Trident Distributed Shares to be acquired by such Trident Party in
the Transaction are “restricted securities” and have not been registered under
the Securities Act or any other applicable securities Laws. Each Trident Party
also understands that the applicable Trident Distributed Shares are being issued
and transferred pursuant to exemptions from registration contained in the
Securities Act and other applicable securities Laws based in part upon each
Trident Party’s representations contained in this Agreement and that the
applicable Trident Distributed Shares must continue to be held by each Trident
Party unless a subsequent disposition thereof is registered under the Securities
Act and any other applicable securities Laws or is exempt from such
registration. Each Trident Party further understands that a legend will be
placed on any certificate or certificates evidencing any of the Trident
Distributed Shares stating that such shares have not been registered under the
Securities Act or any other applicable securities Laws and such shares are
subject to restrictions on transferability and sale.
(h)    Investment Purpose. Each Trident Party is acquiring the applicable
Trident Distributed Shares for its own account solely for the purpose of
investment, not as nominee or agent, and not with a view to, or for sale in
connection with, any distribution of such shares, and each Trident Party has no
present intention of selling, granting any participation in, or otherwise
distributing the same, in violation of the Securities Act or

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any other applicable securities Laws. Each Trident Party has no present
agreement, undertaking, arrangement, obligation or commitment providing for the
disposition of the applicable Trident Distributed Shares.
(i)    Shareholder Status. Each Trident Party is either (i) an “accredited
investor” as defined in Rule 501(a) of Regulation D promulgated under the
Securities Act or (ii) a “qualified institutional Buyer” as defined in Rule
144A(a) under the Securities Act.
(j)    Access to Information. Each Trident Party acknowledges that it has been
afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of North Bay and its Affiliates
concerning the terms and conditions of the Transaction and the merits and risks
of investing in the Trident Distributed Shares; (ii) access to information about
North Bay, Northshore and their respective Subsidiaries and their respective
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that North Bay and its
Affiliates possess or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the Trident
Distributed Shares, as applicable. Each Trident Party acknowledges that (i) the
value of the distributions to be made under this Agreement represents a
negotiated price between sophisticated parties and (ii) no representation or
warranty as to the current or future fair market value of the Trident
Distributed Shares has been made by North Bay or any of its Affiliates or by
either Enstar Party.
(k)    Title to Shares. Each Trident Party is the record owner (legally and
beneficially) of the North Bay Common Shares as indicated on Schedule I attached
hereto, which are held free and clear of all Liens, except as set forth in the
North Bay Shareholders’ Agreement or the Organizational Documents of North Bay.
3.4    Representations and Warranties of the Dowling Parties. Each Dowling Party
hereby represents and warrants as of the date hereof and as of the Closing Date
to each other party hereto as follows:
(a)    Existence; Good Standing. Each Dowling Party has been duly organized and
is validly existing as an exempted company in good standing under the Laws of
the jurisdiction of its organization or formation and has all requisite power
and authority to own and operate its properties and to conduct its business as
conducted as of the date hereof.
(b)    Authorization, Authority and Enforceability. This Agreement and each
other Transaction Agreement to which each Dowling Party is a party have been
duly authorized, executed and delivered by such Dowling Party. Each Dowling
Party has full right, power and authority to enter into and perform its
obligations under this Agreement and such other Transaction Agreements. Assuming
the due authorization, execution and delivery of this Agreement and such other
Transaction Agreements by the other parties hereto and thereto, this Agreement
and each such other Transaction Agreement constitute legal, valid and binding
obligations of each Dowling Party enforceable against each Dowling Party in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar Laws relating to or limiting creditors’ rights generally.
(c)    No Conflict. The execution, delivery and performance by each Dowling
Party of this Agreement and the other applicable Transaction Agreements do not
and will not, assuming the accuracy of the representations and warranties of the
other parties contained herein and the approval of the applicable regulator(s)
in the jurisdictions set forth on Exhibit H hereto and after giving effect to
the terms and conditions of this Agreement, (i) violate any provision of any Law
or Permit applicable to each Dowling Party, (ii) result in a violation or breach
of any provision of the Organizational Documents of any Dowling Party, or
(iii) require any consent, approval or notice (other than those previously
obtained or given or as set forth on Exhibit I hereto) under or result in a
violation or breach of or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under any material contract to which a Dowling Party is a
party, except in the case of clauses (i) and (iii) where any such violation,
default, breach, termination, cancellation, failure to receive consent or
approval or give notice, or acceleration would not, individually or in the
aggregate, reasonably be expected to adversely impact the Transaction.
(d)    Consents. No consent, approval or authorization of, or declaration or
filing with, or notice to, any Governmental Authority is required by or with
respect to each Dowling Party in connection with the execution and delivery of
this Agreement or the other Transaction Agreements by each Dowling Party, or the
consummation by each Dowling Party of the transactions contemplated hereby and
thereby, except for the

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approvals, filings and notices set forth on Exhibit H hereto and such other
consents, approvals, authorizations, declarations, filings or notices that if
not obtained or made would not, individually or in the aggregate, reasonably be
expected to adversely impact the Transaction.
(e)    Brokers. There is no broker, finder or other party that is entitled to
receive from any Dowling Party any brokerage or finder’s fee or other fee or
commission as a result of any of the transactions contemplated by this
Agreement.
(f)    Economic Risk. Each Dowling Party has sufficient knowledge,
sophistication and experience in financial and business matters so as to be able
to evaluate the risks and merits of its investment in Northshore and RemainCo.
Each Dowling Party’s financial condition is such that it is able to bear the
risk of holding the Northshore Common Shares and the RemainCo Common Shares to
be received by it pursuant to the terms hereof (collectively, the “Dowling
Distributed Shares”) for an indefinite period of time and the risk of loss of
its entire investment in the Dowling Distributed Shares.
(g)    Investment Representations. Each Dowling Party understands that the
Dowling Distributed Shares are “restricted securities” and have not been
registered under the Securities Act or any other applicable securities Laws.
Each Dowling Party also understands that the Dowling Distributed Shares are
being transferred pursuant to exemptions from registration contained in the
Securities Act and other applicable securities Laws based in part upon such
Dowling Party’s representations contained in this Agreement and that the Dowling
Distributed Shares must continue to be held by the Dowling Parties unless a
subsequent disposition thereof is registered under the Securities Act and any
other applicable securities Laws or is exempt from such registration. Each
Dowling Party further understands that a legend will be placed on any
certificate or certificates evidencing any of the Dowling Distributed Shares
stating that such shares have not been registered under the Securities Act or
any other applicable securities Laws and such shares are subject to restrictions
on transferability and sale.
(h)    Investment Purpose. Except as set forth in this Agreement, each Dowling
Party is acquiring the Dowling Distributed Shares for its own account solely for
the purpose of investment or to effect the Transaction, not as nominee or agent,
and not with a view to, or for sale in connection with, any distribution of such
shares, and, except as set forth in this Agreement, each Dowling Party has no
present intention of selling, granting any participation in, or otherwise
distributing the same, in violation of the Securities Act or any other
applicable securities Laws. Each Dowling Party has no present agreement,
undertaking, arrangement, obligation or commitment providing for the disposition
of the Dowling Distributed Shares.
(i)    Shareholder Status. Each Dowling Party is either (i) an “accredited
investor” as defined in Rule 501(a) of Regulation D promulgated under the
Securities Act or (ii) a “qualified institutional Buyer” as defined in Rule
144A(a) under the Securities Act.
(j)    Access to Information. Each Dowling Party acknowledges that it has been
afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of North Bay and its Affiliates
concerning the terms and conditions of the Transaction and the merits and risks
of investing in the Dowling Distributed Shares; (ii) access to information about
North Bay, Northshore and their respective Subsidiaries and their respective
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that North Bay and its
Affiliates possess or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the Dowling
Distributed Shares, as applicable. Dowling acknowledges that (i) the value of
the distributions to be made under this Agreement represents a negotiated price
between sophisticated parties and (ii) no representation or warranty as to the
current or future fair market value of the Dowling Distributed Shares has been
made by North Bay or any of its Affiliates or by any Enstar Party or Trident
Party.
(k)    Title to Shares. Each Dowling Party is the record owner (legally and
beneficially) of the North Bay Common Shares as indicated on Schedule I attached
hereto, which are held free and clear of all Liens, except as set forth in the
North Bay Shareholders’ Agreement or the Organizational Documents of North Bay.

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Article IV
OTHER AGREEMENTS OF THE PARTIES
4.1    Confidentiality.
(a)    Each party hereto (including their respective managers, directors,
officers, employees, agents and other representatives) agrees to retain in
confidence all Confidential Information, and will not disclose to any third
party, or permit the disclosure to any third party of, any Confidential
Information. No party hereto shall disclose any Confidential Information to any
of their respective managers, directors, officers, employees, agents or other
representatives except as necessary for purposes of consummating the Transaction
or as required by Applicable Law. Notwithstanding the foregoing, the parties may
make public disclosures of Confidential Information (1) with the prior written
consent of the other parties or (2) as required by Applicable Law or the rules
and regulations of the SEC or Nasdaq; provided that any party under such
requirement shall, to the extent reasonably practicable and not prohibited by
such Applicable Law, judicial process, rules and regulations of any stock or
securities exchange, or Governmental Authority, provide the other parties hereto
with prompt written notice of such disclosure in order to give such other
parties an opportunity to comment on any proposed disclosure (which comment
shall be considered by such the applicable party in good faith). Further, Enstar
shall be permitted to disclose the foregoing information to its finance
providers and rating agencies for bona fide purposes subject to such finance
providers and rating agencies being subject to customary confidentiality
obligations, and the Trident-Dowling Parties shall be permitted to disclose
Confidential Information to any of their respective direct or indirect
shareholders, limited partners, or investors, whether existing or potential,
provided that such shareholders, limited partners or investors are advised of
the confidential nature of such information and are subject to typical
obligations of confidentiality for investors in a private equity fund.
(b)    Each party hereto shall consult with each other prior to issuing any
press releases or other public disclosure with respect to the Transaction, and
no party hereto shall issue any such press release or other public disclosure
without the prior written consent of Enstar and Trident, which consent shall not
unreasonably be withheld, except if such disclosure is required by Applicable
Law, in which case the disclosing party shall promptly provide each other party
with prior notice of such public statement or communication and promptly
consider in good faith any comments made by such other parties on such public
statement or communication.
4.2    Shareholders’ Agreements.
(a)    Kenmare, North Bay and each of the Trident-Dowling Parties hereby waive
any and all provisions of the North Bay Shareholders’ Agreement (and, to the
extent incorporated therein, the Bayshore and Northshore shareholders agreements
attached thereto) and the Northshore Shareholders’ Agreement applicable to the
Transaction, including any provision requiring the affirmative consent of such
party with respect to any element of the Transaction.
(b)    North Bay, Kenmare and each of the Trident-Dowling Parties hereby waive
any and all provisions of the memorandum of association and bye-laws of North
Bay or any of its Subsidiaries requiring the affirmative consent of such party
with respect to any element of the Transaction.
(c)    From the date hereof until the earlier of the Closing Date and the
termination of this Agreement in accordance with its terms: (i) no Enstar Party
or Trident Party shall, directly or indirectly, exercise the put/call options
and related provisions as set forth in the North Bay Shareholders’ Agreement
(including any other agreements incorporated therein); and (ii) no Enstar Party
nor any Trident-Dowling Party shall Transfer (as such term is defined in the
North Bay Shareholders’ Agreement) any North Bay Common Shares.
(d)    Effective as of the later to occur of the Closing and the dissolution of
North Bay, each of Kenmare, North Bay and each of the Trident-Dowling Parties
hereby consent to the termination of the North Bay Shareholders’ Agreement.
(e)    Each of the parties hereto consents to the transactions contemplated
hereby, including without limitation, (i) entry into the A&R Northshore
Shareholders’ Agreement, (ii) entry into the RemainCo Shareholders’ Agreement,
(iii) the adoption of the Amended and Restated Northshore Bye-Laws to the extent

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such Person will be a shareholder of Northshore as of the Closing, and (iv) the
adoption of the RemainCo Bye-Laws to the extent such Person will be a
shareholder of RemainCo as of the Closing.
4.3    Efforts to Consummate.
(a)    Each party hereto shall use its reasonable best efforts to take, or cause
to be taken, all appropriate action, to do, or cause to be done, all things
necessary, proper or advisable under Applicable Law, and to execute and deliver
such documents and other papers, as may be required to carry out the provisions
of this Agreement and make effective the transactions contemplated by this
Agreement as promptly as possible (including, without limitation, the
satisfaction of applicable conditions set forth in Section 2.5).
(b)    Without limiting the foregoing, each party hereto shall, as promptly as
possible, use reasonable best efforts to obtain, or cause to be obtained, all
approvals, consents and authorizations from Governmental Authorities that may be
or become necessary for its execution and delivery of this Agreement or the
performance of its obligations under this Agreement and the other Transaction
Agreements (including, without limitation, those set forth on Exhibit F, Exhibit
G or Exhibit H hereto, as applicable) and, with respect to Item 3 on Exhibit G,
to the extent applicable, each party will continue to use reasonable best
efforts after the Closing to obtain, or cause to be obtained, such approval.
Each party hereto shall reasonably cooperate with each other party and its
Affiliates in connection with such party seeking to obtain such approvals,
consents and authorizations and shall not willfully take any action that would
reasonably be expected to have the effect of delaying, impairing or impeding the
receipt of such approvals, consents and authorizations.
(c)    Notwithstanding anything herein to the contrary, including this Section
4.3 or the “reasonable best efforts” standard, nothing in this Agreement shall
require any party to take or refrain from taking or to agree to it or its
Affiliates taking or refraining from taking any action, or to suffer to exist
any restriction, condition or requirement that would constitute a Burdensome
Condition, unless waived by Enstar (with respect to any Enstar Burdensome
Condition), Trident (with respect to any Trident Burdensome Condition) or
Dowling (with respect to any Dowling Burdensome Condition).
(d)    All material analyses, appearances, meetings, discussions, presentations,
memoranda, proposals or filings made by or on behalf of any party hereto before
any Governmental Authority in connection with its execution and delivery of this
Agreement or the performance of its obligations under this Agreement and the
other Transaction Agreements shall be disclosed to Enstar and Trident in advance
of any filing, submission or attendance, it being the intent of the parties
hereto that Enstar and Trident will consult and cooperate with each other, and
consider in good faith the views of one another, in connection with any such
analyses, appearances, meetings, discussions, presentations, memoranda,
proposals or filings.
(e)    Each party shall cooperate and use commercially reasonable efforts to
give all notices to, and obtain all consents from, all third parties that are
described in Exhibit I; provided, however, that no party shall be obligated to
pay any consideration therefor to any third party from whom consent or approval
is requested.
(f)    North Bay shall, and shall cause SFL to, comply with their respective
obligations under the Core Purchase Agreement and shall not agree prior to the
Closing to any waiver or amendment of the Core stockholders agreement (attached
as an exhibit to the Core Purchase Agreement) without the consent of Trident
solely to the extent such waiver or amendment would (i) affect the transfer
provisions set forth therein so as to delay or impede the transactions
contemplated by this Agreement or (ii) adversely affect Enstar’s right to
appoint one or more directors to the Core board of directors. The Enstar Parties
and North Bay shall keep the Trident Parties reasonably apprised on a prompt
basis of the status of the transactions contemplated by the Core Purchase
Agreement, including the receipt of any material correspondence from any
Governmental Authority relating thereto. Notwithstanding anything to the
contrary set forth in this Agreement, the Enstar Parties shall not be prohibited
from terminating the Core Purchase Agreement if they are entitled to do so
pursuant to the terms thereof.
4.4    Fees and Expenses. Whether or not the Closing occurs, except as set forth
in Section 4.6, each party will pay its own fees, costs and expenses of its
advisers, counsel, accountants and other experts, if any, and all other costs
and expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement and the other Transaction
Agreements and the Transaction. For the avoidance of doubt, each party will pay
its own fees, costs and expenses as they relate to any necessary regulatory
approvals or other regulatory filings. Notwithstanding the foregoing, Enstar and
Trident shall each bear half of the fees, costs and expenses of the

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counsel engaged by or on behalf of such parties in jurisdictions other than the
United States or the United Kingdom in connection with the analysis of
regulatory approvals relating to the Transaction in such jurisdictions.
4.5    Conduct of the Business. From the date of this Agreement until the
earlier of the Closing Date or termination of this Agreement in accordance with
its terms, each of Kenmare and Trident shall use their respective reasonable
best efforts to cause Northshore and its Subsidiaries to operate and carry on
their respective businesses in the ordinary course of business and to maintain
and preserve its business organization, assets, properties and business
relationships and goodwill with those having business dealings with it;
provided, however, that (i) subject to the parties’ obligations under Section
4.2, any action, consequence or effect that results from the exercise of any
right of a party hereto under the North Bay Shareholders’ Agreement (including,
without limitation, under Section 2.02 thereof) or any Organizational Document
of North Bay or its Subsidiaries shall not constitute a breach of this Section
4.5 and this Section 4.5 shall not constitute a limitation or restriction on the
exercise of any such right, (ii) any action required to be taken by any party or
their respective Affiliates pursuant to the Core Purchase Agreement shall not be
a breach of this Section 4.5 and (iii) any action taken by any of the parties or
their respective Affiliates in furtherance of any run-off plan for RemainCo and
its Subsidiaries (excluding StarStone US and its Subsidiaries) and/or any
transfer or transition of the renewal rights of the StarStone International
business of such companies to Atrium and its Affiliates, in each case as may be
approved from time to time by North Bay, the Enstar Parties and Trident shall
not be a breach of this Section 4.5. Without limiting the generality of the
foregoing, from the date of this Agreement until the earlier of the Closing Date
or termination of this Agreement in accordance with its terms, except as
required by any Transaction Agreement or by Applicable Law or as set forth in
Section 4.5 of the Disclosure Schedule, without the prior written consent of
each of Enstar and Trident (which consent shall not be unreasonably withheld,
conditioned or delayed), neither Northshore nor any of its Subsidiaries, nor,
solely in the case of clauses (a)-(d), (e)(i), (g)(I) and (n), North Bay, shall
(and Kenmare and Trident shall not permit Northshore or any of its Subsidiaries
or, to the extent applicable, North Bay to):
(a)    (A) split, combine or reclassify any shares or other interests
representing the outstanding capital stock or equity securities of such Person
or (B) issue any other stock or securities in respect of, in lieu of or in
substitution for such shares or other interests;
(b)    issue, sell, grant, pledge or otherwise encumber any shares or other
interests representing the capital stock of or equity interests of such Person,
any other voting securities or any securities convertible into or exchangeable
for any such shares or interests, or issue, sell, grant or enter into any
subscription, warrant, option, conversion or other right, agreement, commitment,
arrangement or understanding of any kind, contingent or otherwise, to purchase
or otherwise acquire, any such shares or interests, or any securities
convertible into or exchangeable for any such shares or interests;
(c)    repurchase, redeem or otherwise acquire any securities or equity
equivalents of such Person;
(d)    declare, set aside or pay any dividends on, or make any other actual,
constructive or deemed distributions (whether in cash, shares, property or
otherwise) in respect of, any shares of the capital stock or the shares of stock
or other equity interests of such Person;
(e)     (i) adopt or enter into a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization, of such Person or (ii) purchase, sell, lease, exchange or
otherwise dispose of or acquire any property or assets of Northshore or any of
its Subsidiaries (other than transactions with respect to investment assets in
accordance with the investment guidelines of Northshore or any of its
Subsidiaries);
(f)    acquire or agree to acquire (whether by merger, consolidation, purchase
of assets or by any other means) (A) any business or any division thereof or (B)
any capital stock, other equity or debt securities or equity or ownership
interest in or of any other Person, other than investment assets acquired in
accordance with the investment guidelines of Northshore or any of its
Subsidiaries;
(g)    except as set forth on Section 4.5(g) of the Disclosure Schedule: (A)
grant any incentive awards or make any increase in the salaries, bonuses or
other compensation and benefits payable by Northshore or any of its Subsidiaries
to any of its employees, officers or directors, except for ordinary course base
salary increases consistent with past practices, (B) terminate or amend any
Employee Benefit Plan except for routine renewals that do not materially
increase costs thereunder, or grant, amend or terminate any awards thereunder,
(C) fund any payments or benefits that are payable or to be provided under any
Employee

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Benefit Plan, (D) adopt or enter into any plan, policy or arrangement for the
current or future benefit of any officer or director of Northshore or any of its
Subsidiaries that would be an Employee Benefit Plan if it were in existence as
of the date hereof, (E) hire or engage any senior management employee of
Northshore or any of its Subsidiaries, (F) terminate without “cause” any senior
management employee of Northshore or any of its Subsidiaries, (G) make any loan
to any present or former employee or other individual service provider of
Northshore or any of its Subsidiaries (other than advancement of expenses in the
ordinary course of business consistent with past practices), (H) enter into,
amend or terminate any collective bargaining agreement or similar agreement with
a labor union or labor organization or (I) transfer the employment of any
employee from one Subsidiary of North Bay to another Subsidiary of North Bay;
(h)    incur, assume or guarantee any indebtedness for borrowed money or assume,
grant, guarantee or endorse, or otherwise as an accommodation become responsible
for, the obligations of another Person for individual amounts in excess of
$25,000 or in the aggregate in excess of $250,000;
(i)    pay, settle or compromise any Action or threatened Action, except for
claims under policies and certificates of insurance within applicable policy
limits and other than any settlement or compromise that involves solely monetary
damages not in excess of $100,000 over any applicable reserve in effect on the
date hereof;
(j)    release any insurance reserves or re-value any investment assets except
as required by GAAP, SAP or Applicable Law;
(k)    make any material change in the pricing, accounting, actuarial,
investment, reserving, underwriting, risk retention, risk management, hedging or
claims administration policies, guidelines, policies, practices or principles of
Northshore or any of its Subsidiaries, except as may be required by GAAP or SAP
and, in the case of underwriting and claims administration, in the ordinary
course of business;
(l)    enter into or consent to any agreement with a Governmental Authority that
would require Northshore or any of its Subsidiaries to take or refrain from
taking any action with respect to its business after the Closing;
(m)    other than in connection with the management of investment assets, make
any loans, advances or capital contributions to, or investments in, any other
Person;
(n)    enter into any contract or other arrangement with an Enstar Related
Person that would have required disclosure on Section 3.2(i) of the Disclosure
Schedule had it been entered into on or prior to the date hereof; or
(o)    enter into a binding agreement to take any of the foregoing actions.
4.6    Commercial Insurance. From and after the Closing Date, the business,
operations, assets, liabilities, personnel, directors and officers of Northshore
and its Subsidiaries shall cease to be insured by Enstar’s or its Affiliates’
insurance policies, and none of the Trident-Dowling Parties, Northshore or their
respective Affiliates (as determined as of the Closing after giving effect to
the Transaction) shall have any access, right, title or interest to or in any
such insurance policies (including to any claims or rights to make claims or any
rights to proceeds). Notwithstanding the foregoing, with respect to events or
circumstances relating to Northshore and its Subsidiaries that occurred or
existed prior to the Closing that are covered by occurrence-based third party
liability insurance policies of Enstar or its Affiliates and any workers’
compensation insurance policies and that apply to the locations at which
Northshore or any of its Subsidiaries operate their business, Northshore may,
and may cause its Subsidiaries to, make claims under such policies and programs;
provided, however, that neither Northshore nor any of its Subsidiaries shall
make any such claims if, and to the extent that, such claims are covered by
insurance policies maintained by Northshore or any of its Subsidiaries. Enstar
and its Affiliates will provide reasonable cooperation and assistance in the
pursuit of such claim. With respect to any open claims against the insurance
policies of Enstar or its Affiliates relating to losses or damages suffered by
Northshore or any of its Subsidiaries prior to the Closing, Enstar and its
Affiliates shall (i) use their commercially reasonable efforts to pursue such
claims and shall reasonably cooperate with and assist Northshore and its
Subsidiaries in doing the same and (ii) remit to Northshore or its applicable
Subsidiary any and all proceeds realized from such claims upon settlement of
such claims, net of any reasonable out-of-pocket expenses incurred by Enstar or
its Affiliates in connection with the performance of their obligations pursuant
to the foregoing clause (i). Enstar

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and its Affiliates may amend any insurance policies in the manner it deems
appropriate to give effect to this Section 4.6.
4.7    Separation-Related Matters.
(a)    Intercompany Accounts and Contracts. Except pursuant to or as
contemplated by any Transaction Agreement, all intercompany accounts and
contracts relating to relationships or services as of the Closing Date between
Enstar or its Affiliates (other than Northshore and its Subsidiaries), on the
one hand, and Northshore or any of its Subsidiaries, on the other hand, shall be
settled in full or terminated, as applicable, on or prior to the Closing.
(b)    Lloyd’s. Prior to the Closing, the Enstar Parties and Trident shall use
their respective reasonable best efforts to effect the steps and transactions
outlined on Exhibit J attached hereto with respect to the existing funds at
Lloyd’s arrangements described on such Exhibit.
(c)    Northshore LTIP. Prior to the Closing, Trident shall use its reasonable
best efforts to effect the treatment outlined on Exhibit K attached hereto with
respect to the Northshore LTIP and participants thereunder.
(d)    Transition Matters. To the extent that any service set forth in Schedule
II attached hereto is completed to the reasonable satisfaction of Trident as of
the Closing, such service shall be excluded from the services set forth in the
Transition Services Agreement.
4.8    Certain Other Covenants.
(a)    As consideration for and to induce the Trident-Dowling Parties to enter
into this Agreement, during the Restricted Period, the Enstar Parties shall not,
and shall cause their respective controlled Affiliates (including RemainCo and
its Subsidiaries after the Closing, but excluding Core and its Subsidiaries) not
to:
(i)    knowingly solicit or assist in the solicitation of any supplier, licensee
or service provider with whom Northshore or any of its Subsidiaries has a
commercial relationship, whether by contract or otherwise, for the purpose of
causing such supplier, licensee or service provider to reduce, discontinue or
alter, in a manner adverse to Northshore or its Subsidiaries or their respective
businesses, such commercial relationship; provided that actions taken by the
Enstar Parties and such Affiliates in the ordinary course of business with such
suppliers, licensees and service providers shall not constitute, or be deemed to
constitute, a breach of this Section 4.8(a)(i); or
(ii)    directly or indirectly, solicit or assist in the solicitation of or hire
any individual who on the Closing Date is an employee of Northshore or any of
its Subsidiaries without the prior written approval of Trident, unless such
individual (i) has not been in the employ of Northshore or any of its
Subsidiaries during the six-month period prior to such solicitation or (ii) is
contacted or solicited through general non-targeted solicitation or
advertisement in a newspaper, online or through an employment agency.
(b)    Each of the parties has carefully read this Section 4.8 and considered
the restraints imposed upon the Enstar Parties, and is in full accord as to the
necessity of such restrictive covenants for the reasonable and proper protection
of the Trident-Dowling Parties and agrees that each restraint imposed by the
provisions of this Section 4.8 is fair and reasonable with respect to subject
matter, geographic scope and time period. It is expressly understood and agreed
that although the parties consider such covenants to be fair and reasonable, if
a judicial determination is made by a court of competent jurisdiction that the
time or any other restriction contained in this Section 4.8 is an invalid or
unenforceable restriction against either of the Enstar Parties, the provisions
of this Section 4.8 shall not be rendered void but shall be deemed amended to
apply to such maximum time and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court
of competent jurisdiction finds that any restriction contained in this Section
4.8 is invalid or unenforceable, and such restriction cannot be amended so as to
make it enforceable, such finding shall not affect the enforceability of any of
the other restrictions contained herein, which shall be given full force and
effect without regard to such finding.
4.9    D&O Liabilities.

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(a)    From and after the Closing Date, and without limiting the right of North
Bay to dissolve as required hereunder, each of Enstar and Trident shall not, and
shall cause their respective Affiliates not to, take any steps that would
reasonably be expected to affect adversely the rights of any individual who
served as a director or officer of North Bay or any of its Subsidiaries at any
time prior to the Closing Date (each, a “D&O Indemnified Person”) to be
indemnified, either under Applicable Law or the Organizational Documents of such
company or its Subsidiaries as they existed immediately prior to the Closing
Date, against any costs or expenses (including attorneys’ fees and expenses of
investigation, defense and ongoing monitoring), judgments, penalties, fines,
losses, charges, demands, actions, suits, proceedings, settlements, assessments,
deficiencies, taxes, interest, obligations, damages, liabilities or amounts paid
in settlement incurred in connection with any claim, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
existing or occurring at or prior to the Closing Date and relating to the fact
that the D&O Indemnified Person was a director or officer of such company or its
Subsidiaries, whether asserted or claimed prior to, at or after the Closing
Date.
(b)    Without limiting the foregoing, Enstar shall cause RemainCo and its
Subsidiaries, and Trident shall cause Northshore and its Subsidiaries, (i) to
maintain in full for a period of not less than six (6) years from the Closing
Date provisions in their respective Organizational Documents concerning the
indemnification and exculpation (including provisions relating to expense
advancement) of such company’s and its Subsidiaries’ former and current
officers, directors and employees that are no less favorable to those Persons
than the provisions of the Organizational Documents of the company or such
Subsidiary, as applicable, in each case, as of the date of this Agreement (and,
in light of the dissolution of North Bay, the Organizational Documents of
RemainCo shall be amended to cover the former officers, directors and employees
of North Bay prior to the Closing Date to the extent permitted by Applicable
Law), and to indemnify and hold harmless such Persons in accordance therewith
and (ii) not to amend, repeal or otherwise modify such provisions in any respect
that would adversely affect the rights of those Persons thereunder, in each
case, except as required by Applicable Law.
(c)     For a period of six (6) years following the Closing Date, the Enstar
Parties shall cause directors’ and officers’ liability insurance and fiduciary
liability insurance to be provided for the benefit of the directors and officers
of North Bay as of immediately prior to the Closing Date on terms and conditions
no less advantageous than the insurance provided for the benefit of such persons
as of immediately prior to the Closing Date.
4.10    Core Related Matters. In the event that the transactions contemplated by
the Core Purchase Agreement are consummated but the Transaction is not
consummated due to the termination of this Agreement in accordance with its
terms, then promptly following such termination, the Enstar Parties and Trident
shall use their respective reasonable best efforts, as applicable, to effect
each of the items set forth on Exhibit L attached hereto.
4.11    Pre-Closing SFL Distribution. Notwithstanding anything to the contrary
set forth herein, if the conditions set forth in Section 2.5 have not been
satisfied immediately following the consummation of the transactions
contemplated by the Core Purchase Agreement, the Shareholders shall cause SFL to
distribute the Core Common Shares to its parent StarStone Insurance (Bermuda)
Limited promptly following the later to occur of (a) the consummation of the
transactions contemplated by the Core Purchase Agreement and (b) the receipt of
any and all regulatory approvals necessary to effect such distribution.
4.12    RemainCo Funding of Fitzwilliam Cell 31. RemainCo shall contribute
capital to Fitzwilliam Cell 31 to the extent necessary to enable Fitzwilliam
Cell 31 to duly and punctually perform its payment obligations to StarStone
Insurance (Bermuda) Limited under, and subject to the applicable terms of, the
Quota Share Reinsurance Contracts prior to either Enstar or Trident having to
perform their respective obligations as guarantors under Article 8 of each Quota
Share Reinsurance Contract.
4.13    Share Readjustment.
(a)    Promptly after the date hereof and prior to the Closing, Kenmare and
Trident shall, and call cause their respective Affiliates to, exercise
commercially reasonable efforts to enter into a commutation agreement with a
third party in respect of the Valiant Treaty (the “Commutation Agreement”). To
the extent the Commutation Agreement is entered into prior to Closing, then the
excel sheet attached hereto as Schedule III (the “Calculation Spreadsheet”)
shall be adjusted as provided therein.

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(b)    To the extent that any participants under the 2019 Long Term Incentive
Cash Plan elect to defer any portion of the proceeds payable thereunder as
further described in Exhibit K hereto prior to the Closing, then the percentage
set forth in cell D10 of the “Northshore Valuation” tab of the Calculation
Spreadsheet shall be adjusted to reflect the percentage equal to the number of
units under the 2019 Long Term Incentive Cash Plan that are subject to the
deferral, divided by 7,245 as provided therein.
(c)    To the extent the Core Cash Consideration differs from the amount set
forth in cell E14 of the “StarStone U.S. Valuation” tab of the Calculation
Spreadsheet, the actual amount of the Core Cash Consideration shall be inserted
into such cell.
(d)    After giving effect to Section 4.13(a), Section 4.13(b) and Section
4.13(c) hereof, (i) the calculations set forth in the Calculation Spreadsheet
shall be rerun and (ii) in respect of Northshore, each of Trident, Dowling and
Kenmare shall receive the amount of Northshore Common Shares set forth in Column
K of the “Northshore Capitalization” tab of the Calculation Spreadsheet instead
of the amount of Northshore Common Shares noted in Schedule I attached hereto.
(e)    Notwithstanding anything to the contrary stated herein, participants
under the Northshore LTIP who have received proceeds thereunder as a result of
the Transaction shall, subject to and in accordance with Exhibit K, be entitled
to reinvest such amounts in Northshore (indirectly through the Atrium Nominee)
at the Closing at a price per share equal to the Adjusted Equity Value set forth
in the Calculation Spreadsheet after giving effect to this Section 4.13(a),
Section 4.13(b) and Section 4.13(c), divided by the total outstanding shares of
Northshore Common Shares as of such time.
(f)    To the extent the Commutation Agreement is not entered into prior to the
Closing, Kenmare and Trident shall exercise commercially reasonable efforts to
cause a retrocessional loss portfolio transfer or similar agreement to be
entered into with the effect that Arden Re shall cede, by indemnity reinsurance,
100% of its liabilities arising under the Valiant Treaty to StarStone Insurance
(Bermuda) Limited in exchange for a premium equal to the liabilities assumed,
such agreement to be mutually agreed by Kenmare and Trident.
Article V
TERMINATION
5.1    Optional Termination. Notwithstanding anything herein to the contrary,
this Agreement may be terminated:
(a)    at any time at or prior to Closing by Trident upon a breach in any
material respect by either Enstar Party or North Bay of any representation,
warranty or covenant of such Enstar Party or North Bay set forth in this
Agreement, provided that such breach is not subsequently waived by Trident or,
if such breach is capable of being cured, such breach is not cured within twenty
(20) Business Days after such Enstar Party or North Bay receives written notice
from Trident;
(b)    at any time at or prior to the Closing by an Enstar Party upon a breach
in any material respect by Trident of any representation, warranty or covenant
of Trident set forth in this Agreement, provided that such breach is not
subsequently waived by such Enstar Party or, if such breach is capable of being
cured, such breach is not cured within twenty (20) Business Days after Trident
receives written notice from such Enstar Party;
(c)    by an Enstar Party or Trident in writing, if the Closing has not occurred
on or prior to March 1, 2021, unless the failure of the Closing to occur is the
result of a material breach of this Agreement by the party seeking to terminate
this Agreement; or
(d)    by an Enstar Party or Trident in writing, if the Core Purchase Agreement
has been terminated in accordance with its terms.
5.2    Automatic Termination. Notwithstanding anything herein to the contrary,
this Agreement shall automatically terminate at any time at or prior to the
Closing if a Law shall have been enacted or promulgated, or if any action shall
have been taken by any Governmental Authority of competent jurisdiction, that
permanently restrains,

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permanently precludes, permanently enjoins or otherwise permanently prohibits
the consummation of the transactions contemplated by this Agreement or makes the
Transaction illegal.
5.3    Effect of Termination. In the event of the termination of this Agreement
as provided in this ýArticle V (i) this Agreement shall forthwith become null
and void, except with respect to Section 4.10, this Section 5.3 and Article VI,
which shall continue to survive, and (ii) there shall be no liability on the
part of any party; provided that nothing herein shall relieve any party from any
liability or obligation with respect to any willful breach of this Agreement.
Article VI
MISCELLANEOUS
6.1    Entire Agreement. This Agreement and the documents referred to herein,
together with the exhibits and schedules hereto and thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into this
Agreement and such documents, exhibits and schedules.
6.2    No Other Representations. Except for the representations and warranties
expressly contained in this Agreement, none of the parties hereto has made or
makes any other express or implied representation or warranty with respect to
the subject matter hereof. Each party acknowledges and agrees that: (a) in
making its decision to enter into this Agreement and to consummate the
Transaction contemplated hereby, it has relied solely upon its own investigation
and the express representations and warranties of the other parties hereto set
forth in this Agreement; and (b) none of other parties hereto has made any
representation or warranty, except as expressly set forth in this Agreement.
6.3    Notices. All notices and other communications provided for hereunder
shall be made in writing by hand-delivery, facsimile, e-mail, or air courier
guaranteeing overnight delivery:
if to either Enstar Party or North Bay (prior to the Closing) to:

Enstar Group Limited
Windsor Place, 3rd Floor, 22 Queen Street
Hamilton HM11, Bermuda
Attention: Paul O’Shea
Facsimile No.: (441) 296-0895
Email: paul.oshea@enstargroup.com

with a copy (which shall not constitute notice) to:

Hogan Lovells US LLP
1735 Market Street, Suite 2300
Philadelphia, PA 19103
Attention: Robert C. Juelke
Facsimile No.: (267) 675-4601
Email: bob.juelke@hoganlovells.com

if to Trident to:

c/o Stone Point Capital LLC
20 Horseneck Lane
Greenwich, CT 06830
Attention: Stephen Levey
Facsimile No.: (203) 862-2929
Email: slevey@stonepoint.com

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with a copy (which shall not constitute notice) to:

Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
Attention: Steven A. Seidman and Sean M. Ewen
Facsimile No.: (212) 728-8111
Email: sseidman@willkie.com; sewen@willkie.com

if to Dowling to:

190 Farmington Avenue
Farmington, Connecticut 06032
Attention: Vincent Dowling, Sr. or Caroline Klotz
Facsimile No.: (860) 676-8617
Email: VJ@Dowling.com; Caroline@Dowling.com

6.4    Amendments; Waivers. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of a waiver, by the party against whom enforcement of any such waiver is
sought or, in the case of a modification, supplement or amendment, by each party
hereto, provided, however, that the signature of Dowling on such written
modification, supplement or amendment shall not be required unless such
modification, supplement or amendment would adversely affect Dowling in a manner
disproportionate to the manner in which Trident would be adversely affected by
such amendment. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.
6.5    Headings. The headings herein are for convenience only, do not constitute
a part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party. All references in this
Agreement to Sections, Schedules or Exhibits, unless otherwise expressed or
indicated, are to the Sections, Schedules or Exhibits of or to this Agreement.
6.6    Successors and Assigns. Neither this Agreement nor any of the rights,
interests or obligations hereunder is binding upon and inures to the benefit of
any parties other than the parties hereto and their respective successors and
permitted assigns, and there are no third party beneficiaries of this Agreement.
No party will assign this Agreement (or any portion hereof, or any rights or
obligations hereunder) without the prior written consent of the other parties
hereto.
6.7    Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal Laws of the State of
Delaware, without regard to the principles of conflicts of law thereof that
would require the application of the Laws of any other jurisdiction. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the State of Delaware. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the State of Delaware for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court or that such suit, action or proceeding is an
improper or inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by Applicable Law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

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6.8    Survival; Several Liability. The representations, warranties, covenants
and other agreements contained herein shall survive the Closing for one year,
except (i) with respect to those covenants that by their nature are intended to
be performed after the Closing, which shall survive for sixty (60) days
following the period provided in such covenant, if any, or until fully performed
in accordance with its terms and (ii) with respect to the Fundamental
Representations, which shall survive the Closing for six years. Each party shall
be responsible only for its own representations, warranties, covenants and
agreements hereunder; provided, however, that the representations, warranties,
covenants and agreements of (a) either Enstar Party shall be the responsibility
of each Enstar Party, (b) any Trident Party shall be the responsibility of each
Trident Party, (c) any Dowling Party shall be the responsibility of each Dowling
Party and (d) North Bay (solely with respect to any covenants for the period
prior to the Closing Date) shall be the responsibility of each Enstar Party.
6.9    Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile or email transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or email signature
page were an original thereof.
6.10    Specific Performance. The parties agree that if any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached, irreparable damage would occur, no adequate remedy at
law would exist, and damages would be difficult to determine, and that the
parties shall be entitled to seek specific performance of the terms hereof,
without requiring proof of damages or posting of a bond. The rights and remedies
of the parties shall be cumulative (and not alternative).
6.11    Severability. If any provision of this Agreement is held to be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
6.12    Further Assurances. Each party shall execute and deliver such additional
instruments, documents and other writings as may be reasonably requested by any
other party, before or after the Closing, in order to confirm and carry out and
to effectuate fully the intent and purposes of this Agreement and no party shall
take any action that would, or would reasonably be expected to, frustrate the
intent and purposes of this Agreement.
(Signature Pages Follow)

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IN WITNESS WHEREOF, the parties hereto have caused this Recapitalization
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

ENSTAR GROUP LIMITED

By: /s/ Paul O’Shea    
Name: Paul O’Shea
Title: Director

KENMARE HOLDINGS LTD.

By: /s/ Duncan Scott    
Name: Duncan Scott
Title: Director

NORTH BAY HOLDINGS LIMITED

By: /s/ Orla Gregory    
Name: Orla Gregory
Title: Director

 

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TRIDENT V, L.P.
By: Stone Point Capital LLC, its manager
By: /s/ Stephen Levey    
Name: Stephen Levey
Title: Principal and Counsel

TRIDENT V PARALLEL FUND, L.P.
By: Stone Point Capital LLC, its manager

By: /s/ Stephen Levey    
Name: Stephen Levey
Title: Principal and Counsel

TRIDENT V PROFESSIONALS FUND, L.P.
By: Stone Point Capital LLC, its manager
By: /s/ Stephen Levey    
Name: Stephen Levey
Title: Principal and Counsel

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DOWLING CAPITAL PARTNERS I, L.P.

By: Dowling Capital I, LLC, its general partner

By: Dowling Capital SLP I, LLC, its sole member

By: /s/Vincent J. Dowling, Jr.    
Name: Vincent J. Dowling, Jr.
Title: Managing Director

CAPITAL CITY PARTNERS LLC

By: /s/Vincent J. Dowling, Jr.    
Name: Vincent J. Dowling, Jr.
Title: Managing Director

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Solely for purposes of Section 4.12:

STARSTONE SPECIALTY HOLDINGS LIMITED

By: /s/ Paul O’Shea    
Name: Paul O’Shea
Title: Director