exv10w2






Exhibit 10.2

EXECUTION VERSION




SHARE REPURCHASE AGREEMENT




          THIS SHARE REPURCHASE AGREEMENT (this “Agreement”) is dated as of October 1, 2010 by
and among Enstar Group Limited (the “Company”), Paul J. O’Shea (“O’Shea”) and R&H
Trust Co. (BVI) Limited, as trustee of the Elbow Trust (the “Elbow Trust”).




          WHEREAS, O’Shea and his immediate family are the sole beneficiaries of the Elbow Trust;




          WHEREAS, the Elbow Trust desires to sell 100,000 ordinary shares of the Company, par value
$1.00 per share (the “Shares”), to the Company; and




          WHEREAS, the Company desires to purchase the Shares from the Elbow Trust.




          NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and intending to be bound hereby, the
parties hereto agree as follows:




     SECTION 1. SALE AND PURCHASE; CLOSING.



          1.1 Sale and Transfer of the Shares. Subject to the terms and conditions of this
Agreement, the Company shall purchase the Shares from the Elbow Trust at a purchase price of $70.00
per Share, for an aggregate purchase price of $7,000,000, payable as provided in Section 1.2
hereof.




          1.2 Payment. At the Closing (as defined below):




               (a) the Elbow Trust shall (i) deliver to the Company stock certificates, endorsed in blank,
representing the Shares or (ii) cause the Shares to be electronically transferred to the Company’s
account at the Company’s transfer agent;



               (b) the Company shall deliver to the Elbow Trust the promissory note in the form attached
hereto as Exhibit A (the “Trust Note”) as consideration for the Shares;



               (c) O’Shea shall deliver to the Company the lock-up agreement in the form attached hereto as
Exhibit B (the “O’Shea Lock-up”); and



               (d) the Elbow Trust shall deliver to the Company the lock-up agreement in the form attached
hereto as Exhibit C (the “Elbow Trust Lock-up”).



               (e) This Agreement, the Trust Note, the O’Shea Lock-up and the Elbow Trust Lock-up are
collectively referred to herein as the “Transaction Documents.”



     1.3 Closing. The closing of the sale and purchase of the Shares (the
“Closing”) shall



 









 




occur as soon as reasonably practicable following the execution and
delivery of this Agreement and at such place as the parties shall agree.




     SECTION 2. REPRESENTATIONS AND WARRANTIES OF O’SHEA. O’Shea hereby represents and
warrants to the Company as follows:



          2.1 Securities Ownership. The Elbow Trust is the beneficial and record owner of the
Shares, free and clear of any lien, pledge, option, security interest, claim, charge, third party
right or any other restriction or encumbrance (each an “Encumbrance”) and will, at the
Closing, transfer to the Company good and marketable title to the Shares, free and clear of any
Encumbrance. No affiliate of the Elbow Trust or O’Shea, and no immediate family member of O’Shea,
beneficially owns any ordinary shares of the Company or any securities convertible into ordinary
shares of the Company.




          2.2 Authority; Execution and Delivery. O’Shea and the Elbow Trust each have the
requisite power and authority to execute and deliver this Agreement and the other Transaction
Documents to which each is a party, to perform their obligations under this Agreement and the other
Transaction Documents to which each is a party and to consummate the transactions contemplated
hereby and thereby. All requisite action has been taken to authorize the execution, delivery and
performance by O’Shea and the Elbow Trust of this Agreement and the other Transaction Documents to
which each is a party and the consummation of the transactions contemplated hereby and thereby,
and, with respect to the Elbow Trust, no other proceedings on the part of the trust or its trustee
are necessary to authorize the execution, delivery and performance of this Agreement and the other
Transaction Documents to which it is a party and the consummation of the transactions contemplated
hereby and thereby. This Agreement and the other Transaction Documents to which each of O’Shea and
the Elbow Trust is a party have been duly executed and delivered by each of O’Shea and the Elbow
Trust and constitute the legal, valid and binding obligations of O’Shea and the Elbow Trust,
enforceable against O’Shea and the Elbow Trust in accordance with their terms, except as limited by
bankruptcy, insolvency or other similar laws of general application relating to or affecting the
enforcement of creditors’ rights and general principles of equity.




          2.3 No Conflicts; Consents. The execution, delivery and performance by O’Shea and the
Elbow Trust of this Agreement and the other Transaction Documents to which each is a party, and the
consummation of the transactions contemplated hereby and thereby, do not and will not: (a) with
respect to the Elbow Trust, conflict with or result in a violation or breach of, or default under,
any provision of the trust’s organizational or trust documents; (b) conflict with or result in a
violation or breach of any provision of any law or governmental order applicable to O’Shea or the
Elbow Trust; (c) require the consent, notice or other action by any person under, conflict with,
result in a violation or breach of, constitute a default or an event that, with or without notice
or lapse of time or both, would constitute a default under, result in the acceleration of or create
in any party the right to accelerate, terminate, modify or cancel any contract to which O’Shea or
the Elbow Trust is a party or by which O’Shea or the Elbow Trust is bound or to which any of their
properties and assets are subject; or (d) result in the creation or imposition of any Encumbrance
on any properties or assets of O’Shea or the Elbow Trust. No consent, approval, permit,
governmental order, declaration or filing with, or notice to, any governmental authority is
required by or with respect to O’Shea or the Elbow Trust in


2









 







connection with the execution and
delivery of this Agreement and the other Transaction Documents to which O’Shea or the Elbow Trust is a party and the consummation of the
transactions contemplated hereby and thereby (except for any filings that may be required by the
U.S. Securities and Exchange Commission as a result of obligations under Section 13 or Section 16
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) .




     SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to O’Shea and the Elbow Trust as follows:



          3.1 Authority; Execution and Delivery. The Company has the requisite power and
authority to execute and deliver this Agreement and the other Transaction Documents to which it is
a party, to perform its obligations under this Agreement and the other Transaction Documents to
which it is a party and to consummate the transactions contemplated hereby and thereby. All
requisite action has been taken to authorize the execution, delivery and performance by the Company
of this Agreement and the other Transaction Documents to which it is a party and the consummation
of the transactions contemplated hereby and thereby, and no other proceedings on the part of the
Company are necessary to authorize the execution, delivery and performance of this Agreement and
the other Transaction Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby. This Agreement and the other Transaction Documents to which the
Company is a party have been duly executed and delivered by the Company and constitute the legal,
valid and binding obligations of the Company, enforceable against the Company in accordance with
their terms, except as limited by bankruptcy, insolvency or other similar laws of general
application relating to or affecting the enforcement of creditors’ rights and general principles of
equity.




          3.2 No Conflicts; Consents. The execution, delivery and performance by the Company of
this Agreement and the Transaction Documents to which it is a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will not: (a) conflict with or result in a
violation or breach of, or default under, any provision of the memorandum of association, bye-laws
or other organizational documents of the Company; (b) conflict with or result in a violation or
breach of any provision of any law or governmental order applicable to the Company; (c) require the
consent, notice or other action by any person under, conflict with, result in a violation or breach
of, constitute a default or an event that, with or without notice or lapse of time or both, would
constitute a default under, result in the acceleration of or create in any party the right to
accelerate, terminate, modify or cancel any contract to which the Company is a party or by which
the Company is bound or to which any of its properties and assets are subject; or (d) result in the
creation or imposition of any Encumbrance on any properties or assets of the Company. No consent,
approval, permit, governmental order, declaration or filing with, or notice to, any governmental
authority is required by or with respect to the Company in connection with the execution and
delivery of this Agreement and the other Transaction Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby (except for any filings that may
be required by the U.S. Securities and Exchange Commission as a result of the Company’s obligations
under the Exchange Act or by any insurance authority or other regulatory body with jurisdiction
over the Company or any of its subsidiaries).




          SECTION 4. FURTHER ASSURANCES. Each party hereto shall
use its commercially


3









 







reasonable efforts to execute all documents necessary or desirable to effect the transaction contemplated hereunder.




          SECTION 5. ENTIRE AGREEMENT; EFFECT ON PRIOR DOCUMENTS. This Agreement and the other
documents referred to herein or delivered pursuant hereto contain the entire agreement among the
parties with respect to the transaction contemplated hereby and supersede all prior negotiations,
commitments, agreements and understandings among them with respect thereto.




          SECTION 6. COUNTERPARTS; FACSIMILE AND PDF SIGNATURES. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. Signatures of the parties transmitted by facsimile
or pdf shall be deemed to be their originals for all purposes.




          SECTION 7. GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the substantive laws of Bermuda without regard to its principles of
conflicts of laws.




[Signature Page Follows]







4









 








     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.



	 	 	 	 	 
	 	ENSTAR GROUP LIMITED

 	 
	 	By:  	/s/ Richard J. Harris
 	 
	 	 	Name:  	Richard J. Harris 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	 	 
	 	/s/ Paul J. O’Shea
 	 
	 	PAUL J. O’SHEA 	 
	 	 	 
	 



	 	 	 	 	 
	 	The COMMON SEAL of R&H TRUST CO. (BVI) LIMITED, as
trustee of THE ELBOW TRUST was hereunto affixed in the presence of

	 
	 	By:  	/s/ Craig Williams
 	 
	 	 	Name:  	Craig Williams 	 
	 	 	Title:  	Director 	 
	 



[Affix Seal Above]




[Signature Page to O’Shea Share Repurchase Agreement]






5









 








EXHIBIT A




Trust Note



See attached.








 









 





PROMISSORY NOTE




	 	 	 
	$7,000,000

	 	October __, 2010

Hamilton, Bermuda






     FOR VALUE RECEIVED, ENSTAR GROUP LIMITED, a Bermuda exempted company, (“Maker”), hereby
unconditionally promises to pay to the order of R&H TRUST CO. (BVI) LIMITED, as trustee of THE
ELBOW TRUST, a trust formed under the laws of the British Virgin Islands (“Payee”), in installments
as hereinafter provided, the principal amount of SEVEN MILLION DOLLARS ($7,000,000), together with
interest on the outstanding principal balance hereof from time to time outstanding from the date
hereof and until this Note is paid in full, whether before or after maturity, at an annual rate of
three and one-half percent (3.5%), and, to the extent lawful, to pay interest at the same rate on
any overdue installment of interest.



     Interest shall be calculated on the basis of actual days elapsed and a year of 360 days and
shall be paid in arrears on each Payment Date (as defined below).



     The principal amount hereof shall be repaid on each date specified below, or if the date
specified below is not a business day, on the first business day thereafter (each, a “Payment
Date”), in each case in the amount specified below, such that the Note will be repaid in full on
the last Payment Date:



	 	 	 	 	 
	Payment Date	 	Amount of Repayment
	December 31, 2010

	 	$	2,333,333	 
	December 1, 2011

	 	$	2,333,333	 
	December 1, 2012

	 	$	2,333,334	 






     Payments of principal and interest shall be made in lawful money of the United States of
America by wire transfer of immediately available funds to the account designated in writing to
Maker by Payee or at such other place as the holder of this Note shall designate to Maker in
writing.



     Maker may prepay this Note in whole or in part at any time without premium or penalty. Any
partial prepayment shall be applied to the unpaid installments of principal in the inverse order of
their maturity.



     The occurrence of any of the following shall constitute an “Event of Default” hereunder: (a)
default in any payment by Maker hereunder when due; (b) sale of all or substantially all of Maker’s
assets, or any formal action in contemplation of the dissolution, liquidation or termination of
Maker’s existence; or (c) institution of any proceedings by or against Maker under any law relating
to bankruptcy, insolvency, reorganization or other form of debtor relief or



A-1









 




Maker’s making an assignment for the benefit of creditors, or the appointment of a receiver,
trustee, conservator or other judicial representative for Maker or Maker’s property.




     Upon the occurrence of any Event of Default, all amounts payable hereunder shall, at the
holder’s option but without notice or demand, become immediately due and payable, and the holder
shall thereupon have all rights and remedies provided hereunder or otherwise available at law or in
equity.



     No failure or delay on the part of the holder to insist on strict performance of Maker’s
obligations hereunder or to exercise any remedy shall constitute a waiver of the holder’s rights in
that or any other instance. No waiver of any of the holder’s rights shall be effective unless in
writing, and any waiver of any default or any instance of non-compliance shall be limited to its
express terms and shall not extend to any other default or instance of non-compliance.



     Maker and each endorser hereby waives presentment, notice of nonpayment or dishonor, protest,
notice of protest and all other notices in connection with the delivery, acceptance, performance,
default or enforcement of payment of this Note, and hereby waives all notice or right of approval
of any extensions, renewals, modifications or forbearances which may be allowed.



     Maker shall pay all reasonable costs and expenses (including attorneys’ fees) incurred by the
holder relating to the enforcement of this Note.



     Any provision hereof found to be illegal, invalid or unenforceable for any reason whatsoever
shall not affect the validity, legality or enforceability of the remainder hereof.



     If the effective interest rate on this Note would otherwise violate any applicable usury law,
then the interest rate shall be reduced to the maximum permissible rate and any payment received by
the holder in excess of the maximum permissible rate shall be treated as a prepayment of the
principal of this Note.



     This Note shall be binding upon Maker’s successors and assigns and shall inure to the benefit
of each holder of this Note and such holder’s heirs, personal representatives, successors,
endorsees and assigns.



     This Note shall be construed and interpreted in accordance with the laws of Bermuda (excluding
the laws applicable to conflicts or choice of law). If any of the terms of this Note shall be
declared invalid by any court of competent jurisdiction, such invalidity shall not affect any of
the other terms hereof or such other instrument.



[Signature Page Follows]






A-2









 








     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, has duly executed and
delivered this instrument.



	 	 	 	 	 
	 	ENSTAR GROUP LIMITED

 	 
	 	By:  	 	 
	 	 	Name:  	Richard J. Harris 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



[Signature Page to Trust Note]









A-3









 








EXHIBIT B




O’Shea Lock-up



See attached.



 









 





October __, 2010



Enstar Group Limited

P.O. Box HM 2267

Windsor Place, 3rd Floor

18 Queen Street

Hamilton HM JX

Bermuda





          Re: Share Repurchase by Enstar Group Limited


Dear Sirs:




     The undersigned, a shareholder of Enstar Group Limited, a Bermuda exempted company (the
“Company”), understands that the Company proposes to enter into a Share Repurchase Agreement (the
“Repurchase Agreement”) with the shareholder and R&H Trust Co. (BVI) Limited, as trustee of the
Elbow Trust, providing for the Company’s repurchase of certain of the Elbow Trust’s ordinary shares
of the Company, par value $1.00 per share (the “Ordinary Shares”). In recognition of the benefit
that such a repurchase will confer upon the undersigned, as well as the Elbow Trust, which is
affiliated with the undersigned, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with the Company that, during
a period of two years from the date of the Repurchase Agreement (the “Lock-up Period”), the
undersigned will not, without the prior written consent of the Company, (i) directly or indirectly,
offer, sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise dispose of or
transfer any of the Company’s Ordinary Shares or any securities convertible into or exchangeable or
exercisable for Ordinary Shares, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of disposition (collectively,
the “Lock-Up Securities”) or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership
of the Lock-Up Securities, whether any such swap or other transaction is to be settled by delivery
of Ordinary Shares or other securities, in cash or otherwise.



     Notwithstanding the foregoing, and subject to the conditions below, the undersigned may
transfer the Lock-Up Securities without the prior written consent of the Company:




	 	(i)	 	as a bona fide gift or gifts; or
	 
	 	(ii)	 	to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned (for purposes of this
lock-up agreement, “immediate family” shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin);




B-1









 










provided, in each case, that: (A) the Company receives a signed lock-up agreement for the balance
of the Lock-up Period from each donee, trustee, distributee, or transferee, as the case may be and
(B) any such transfer shall not involve a disposition for value.




     In addition, the undersigned agrees that, without the Company’s prior written consent, the
undersigned will not, during the period commencing on the date hereof and ending at the end of the
Lock-up Period, make any demand for or exercise any right with respect to, the registration of any
Lock-up Securities or any securities convertible into, exercisable for, or exchangeable for Lock-up
Securities.



     The undersigned understands and acknowledges that the terms of this lock-up agreement apply to
Lock-Up Securities that are subject to any pledge arrangement or agreement, and accordingly, any
sale or transfer of any pledged Lock-up Securities in violation of the provisions herein would
constitute a breach of this lock-up agreement for which the Company would be entitled to seek
damages.



     The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of the Lock-Up Securities except in
compliance with the foregoing restrictions.



[Signature Page Follows]






B-2









 








	 	 	 	 	 
	 	Very truly yours,





	 
	 	PAUL J. O’SHEA

 	 
	 	 	 
	 	 	 
	 	 	 
	 



[Signature Page to O’Shea Lock-up]









B-3









 








EXHIBIT C




Elbow Trust Lock-up



See attached.








 









 








October __, 2010



Enstar Group Limited

P.O. Box HM 2267

Windsor Place, 3rd Floor

18 Queen Street

Hamilton HM JX

Bermuda





          Re: Share Repurchase by Enstar Group Limited


Dear Sirs:




     The undersigned, a shareholder of Enstar Group Limited, a Bermuda exempted company (the
“Company”), understands that the Company proposes to enter into a Share Repurchase Agreement (the
“Repurchase Agreement”) with Paul. J. O’Shea and the shareholder providing for the Company’s
repurchase of certain of the shareholder’s ordinary shares of the Company, par value $1.00 per
share (the “Ordinary Shares”). In recognition of the benefit that such a repurchase will confer
upon the undersigned, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with the Company that, during a period of two
years from the date of the Repurchase Agreement (the “Lock-up Period”), the undersigned will not,
without the prior written consent of the Company, (i) directly or indirectly, offer, sell, contract
to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise dispose of or transfer any of the Company’s
Ordinary Shares or any securities convertible into or exchangeable or exercisable for Ordinary
Shares, whether now owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up
Securities”) or (ii) enter into any swap or any other agreement or any transaction that transfers,
in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up
Securities, whether any such swap or other transaction is to be settled by delivery of Ordinary
Shares or other securities, in cash or otherwise.



     Notwithstanding the foregoing, and subject to the conditions below, the undersigned may
transfer the Lock-Up Securities without the prior written consent of the Company as:




	 	(i)	 	a bona fide gift or gifts; or
	 
	 	(ii)	 	distributions by the undersigned to its beneficiaries;




provided, in each case, that: (A) the Company receives a signed lock-up agreement for the balance
of the Lock-up Period from each donee, trustee, distributee, or transferee, as the case may be and
(B) any such transfer shall not involve a disposition for value.







C-1









 










     In addition, the undersigned agrees that, without the Company’s prior written consent, the
undersigned will not, during the period commencing on the date hereof and ending at the end of the
Lock-up Period, make any demand for or exercise any right with respect to, the registration of any
Lock-up Securities or any securities convertible into, exercisable for, or exchangeable for Lock-up
Securities.



     The undersigned understands and acknowledges that the terms of this lock-up agreement apply to
Lock-Up Securities that are subject to any pledge arrangement or agreement, and accordingly, any
sale or transfer of any pledged Lock-up Securities in violation of the provisions herein would
constitute a breach of this lock-up agreement for which the Company would be entitled to seek
damages.



     The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of the Lock-Up Securities except in
compliance with the foregoing restrictions.



[Signature Page Follows]






C-2









 








	 	 	 	 	 
	 	Very truly yours,







The COMMON SEAL of R&H TRUST CO. (BVI)

LIMITED, as trustee of THE ELBOW TRUST was

hereunto affixed in the presence of

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[Affix Seal Above]



	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 



[Signature Page to Elbow Trust Lock-up]





C-3