EXHIBIT 7.5
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November 12, 0000
Xxxxx Xxxxxx Partners, L.P.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Re:Management Rights.
Dear Sir/Madam:
This letter will confirm our agreement that in connection with your
purchase of shares of Common Stock (the "Shares") of NewStar Financial, Inc.
(the "Company") pursuant to that certain Securities Purchase Agreement dated the
date hereof by and among the Company, Union Square Partners, L.P. (the
"Investor"), and the other purchasers identified on the signature pages thereto
(the "Purchase Agreement"), you will be entitled to the following contractual
management rights, in addition to any other rights you may have as a holder of
the Shares:
1. The Investor will be entitled to consult with and advise
management of the Company on significant business issues, including management's
proposed annual operating plans, and management will meet with you regularly
during each year at the Company's facilities at mutually agreeable times for
such consultation and advice and to review progress in achieving said plans,
provided, however, that the Company, the Company's management and the Company's
directors, officers, employees, consultants and agents will have no affirmative
duty to notify or inform the Investor of the existence of any business issue,
nor any affirmative duty to seek the Investor's advice or consultation in
connection with any business issue;
2. The Investor may examine the books and records of the Company
and inspect its facilities and may request information at reasonable times and
intervals concerning the general status of the Company's financial condition and
operations, provided that access to highly confidential proprietary information
and facilities need not be provided; and
3. If the Investor is not represented on the Company's Board of
Directors (the "Board"), the Company will give a representative of the Investor
copies of all notices, minutes, consents, and other material that it provides to
its directors; provided, however, that the Company reserves the right to exclude
such representative from access to any material or portion thereof if the
Company believes upon advice of counsel that such exclusion is reasonably
necessary to preserve the attorney-client privilege, to protect highly
confidential proprietary information or for other similar reasons. Upon
reasonable notice and at a scheduled meeting of the Board or such other time, if
any, as the Board may determine in its sole discretion, such representative may
address the Board with respect to the Investor's concerns regarding significant
business issues facing the Company.
The Investor agrees, and any representative of the Investor will agree, to
hold in confidence and trust and not use or disclose any confidential
information provided to or learned by it in connection with its rights under
this letter.
The rights described herein will terminate and be of no further force or
effect upon the earlier to occur of (i) the consummation of the sale of the
Shares either pursuant to a registration statement filed by the Company under
the Securities Act of 1933, as amended (the "Securities Act"), or pursuant to
Rule 144 (or other exemption from registration under the Securities Act), or
(ii) the date upon which the Investor ceases to hold at least fifty percent
(50%) of the Shares. The confidentiality provisions hereof will survive any such
termination.
This letter may be executed in one or more counterparts, including
counterparts transmitted by facsimile or electronic transmission, each of which
will be deemed an original, but all of which together will constitute one and
the same instrument.
Very truly yours,
NEWSTAR FINANCIAL, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Chief Executive Officer
UNION SQUARE PARTNERS, L.P.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: General Counsel of Union Square Partners GP, Ltd.,
its ultimate general partner
