EXHIBIT 10.4
May 23, 2006
To the undersigned parties
Reference is made to the transactions contemplated by (i) the Agreement and
Plan of Merger (the "Merger Agreement"), dated as of May 23, 2006, among
Castlewood Holdings Limited, a Bermuda company ("Castlewood"), The Enstar Group,
Inc., a Georgia corporation ("Enstar") and CWMS Subsidiary Corp., a Georgia
corporation and (ii) the Recapitalization Agreement (the "Recapitalization
Agreement"), dated as of May 23, 2006, among Castlewood, Enstar and the other
parties named on the signature pages thereto. Capitalized terms used herein
without definition have the meanings given to them in the Merger Agreement or if
not so defined in the Merger Agreement, the Recapitalization Agreement.
Each of the undersigned (each, a "Party") agrees, from the date hereof and
for a period of one year following the Effective Time, not to (i) sell,
transfer, assign, grant a participation interest in or option for, pledge,
hypothecate or otherwise dispose of or encumber (each, a "Transfer"), or enter
into any agreement, contract or option with respect to the Transfer of, or
commit or agree to take any of the foregoing actions with respect to, any of his
or her Ordinary Shares or any option to purchase shares of Company Common Stock
(a "Company Option") or any option to purchase Ordinary Shares upon the
assumption of any such Company Options by Castlewood (a "Castlewood Option"), or
(ii) exercise any Company Option held by such Party on the date hereof or any
Castlewood Option issued in exchange therefore in connection with the Merger;
provided that the foregoing restriction shall not apply to a Transfer (a) to
Castlewood, (b) following the Effective Time, to another Party hereto or any
party to the Recapitalization Agreement other than an Employee Shareholder (as
defined in the Recapitalization Agreement), (c) to a trust under which
distributions may be made only to such Party or his or her immediate family
members, (d) to a charitable remainder trust, the income from which will be paid
to such Party during his or her life, (e) to a corporation, partnership, limited
liability company or other entity, all of the equity interests in which are
held, directly or indirectly, by such Party and his or her immediate family
members, or (f) in connection with a tender offer, merger, amalgamation,
recapitalization, reorganization or similar transaction involving Castlewood,
provided in the case of the foregoing clauses (c) -- (e) that such Party has
sole, ultimate control of the entity referred to and such entity agrees to be
bound by this letter agreement. Any attempt by a Party, directly or indirectly,
to offer, transfer, sell, pledge, hypothecate or otherwise dispose of any of the
Ordinary Shares, Company Options or Castlewood Options, or any interest therein,
or any rights relating thereto, without complying with the provisions of this
letter agreement, shall be void and of no effect. All Ordinary Shares issued to
a Party in the Merger shall bear an appropriate restrictive legend reflecting
the existence of this letter agreement. Each Party shall use best efforts to
cause any Related Person to comply with the forgoing restrictions. A "Related
Person" shall mean any immediate family member, partnership, limited
partnership, trust or other entity that is the record or beneficial owner of any
Company Common Stock, Company Option, Ordinary Shares or Castlewood Option for
which such Party may be deemed to have beneficial ownership.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Please acknowledge your agreement with the foregoing by countersigning
below, whereupon it will be a binding agreement among us. This letter agreement
may be executed in any number of counterparts, each of which shall be an
original, but such counterparts will together constitute one instrument.
Very truly yours,
THE ENSTAR GROUP, INC.
By: ___________________________
Name: Xxxxxx X. Xxxxxx
Title: Chairman and CEO
Agreed as of the date first written above:
_____________________________________
Name: Xxxxxx X. Xxxxxx
Title: Director
_____________________________________
Name: Xxxx X. Xxxx
Title: Director
_____________________________________
Name: T. Xxxx Xxxxxxxxx
Title: Director
_____________________________________
Name: T. Xxxxx Xxxxx
Title: Director
_____________________________________
Name: J. Xxxxxxxxxxx Xxxxxxx
Title: Director
_____________________________________
Name: Xxxxxxx X. Xxxx
Title: Director
_____________________________________
Name: Xxxx X. Xxxxxxx
Title: Director
