Exhibit 10.33
BACKSTOP SUBSCRIPTION AGREEMENT
This BACKSTOP SUBSCRIPTION AGREEMENT, dated as of July 5, 2007 (this
"Agreement"), is made between VALIDUS HOLDINGS, LTD., a company with limited
liability organized under the laws of Bermuda (the "Company"), and each of the
undersigned (each, a "Major Investor" and collectively, the "Major Investors").
WHEREAS, the Company has entered into a Share Sale Agreement dated
May 15, 2007 among the Company and the sellers identified therein relating to
the acquisition (the "Talbot Acquisition") by the Company of all of the issued
share capital of Talbot Holdings Ltd, a company organized under the laws of
Bermuda (together with its subsidiaries, "Talbot");
WHEREAS the Company may make an offer to its members, in accordance
with the provisions of Section 4.1(e) of its Bye-Laws or otherwise, offering
(the "Offering") them the right to subscribe for Common Shares (as defined
below) of the Company; the purpose of the Offering being to provide additional
financial resources to the Company if the Talbot Acquisition is consummated
prior to the consummation of a public offering that provides net proceeds to the
Company of at least US$200,000,000; and
WHEREAS, each of the Major Investors, subject to the terms and
conditions of this Agreement, has severally agreed (i) to purchase their Pro
Rata Portion (as defined in the Bye-Laws) of any Offering and (ii) to purchase
100% of their Percentage Commitment (as indicated on Schedule A hereto) of any
Common Shares not offered to (or if offered to, not for any reason subscribed
for by) members (other than Major Investors) in any such Offering, in each case
up to an aggregate several commitment for all Major Investors of US$200,000,000,
with each Major Investor agreeing to purchase its Percentage Commitment thereof.
In consideration of the premises and mutual agreements herein
contained, the sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
AUTHORIZATION; SUBSCRIPTION FOR SECURITIES
Section 1.1 The Securities. The Company has authorized the issuance
and sale of Voting Common Shares, par value US$0.175 per share (the "Voting
Common Shares"), and Non-Voting Common Shares, par value US$0.175 per share (the
"Non-Voting Common Shares" and, together with the Voting Common Shares, the
"Common Shares"), having a value (determined as set forth below) of
US$200,000,000, such shares each having such rights, restrictions and privileges
contained in the Memorandum of Association and Bye-Laws of the Company as in
effect from time to time (the "Memorandum of Association" and the "Bye-laws,"
respectively). Subject to the terms and conditions hereof, the purchase
severally by each of the Major Investors pursuant to this Agreement of the
Common Shares shall occur on one date (the "Closing Date") determined by the
Company and of which each of the Major Investors has been given at least ten
(10) business days' prior written notice (the "Closing Notice").
The Company acknowledges that it will not deliver a Closing Notice
to a Major Investor unless a Closing Notice is delivered to each Major Investor
requiring each Major Investor to purchase its full Percentage Commitment of any
such Offering.
Section 1.2 Subscription for Securities Pursuant to This Agreement.
Subject to the terms and conditions of this Agreement, each Major Investor,
acting severally and not jointly, hereby ir-
revocably subscribes for and agrees to purchase on the Closing Date up to the
number of Common Shares of the applicable series set forth opposite its name on
Schedule A attached hereto (the "Securities"), for a purchase price per Security
as determined by the Board of Directors (based on the recommendation by the
Finance Committee) and acceptable to the Qualified Sponsors (as defined in the
Bye-Laws) in their sole discretion (the "Purchase Price"). Notwithstanding any
other provision of this Agreement, any Major Investor shall be entitled at any
time prior to the Closing Date to designate in writing one or more entities
affiliated with such Major Investor to purchase the Securities to be purchased
by it.
Section 1.3 Other Subscribers. Prior to any Closing hereunder, the
Company will offer all of its members, in accordance with the provisions of
Section 4.1(e) of its Bye-Laws or otherwise, the right to subscribe for Common
Shares (as defined below) of the Company in the Offering. All such members
(other than the Major Investors) will be entitled to ten (10) business days
advance notice of the price of the Securities to be purchased in the Offering
before they are required to make an investment decision. The Company agrees that
any such member who does not subscribe for its pro rata portion of the Offering
will not be entitled to, or granted a right to, sell Common Shares in the
Company's initial public offering, without the prior written consent of the
Company and the Qualified Sponsors.
ARTICLE II
CLOSING
The closing of the purchase and sale of the Securities contemplated
by this Agreement (the "Closing") shall take place as set forth below.
Section 2.1 Closing Date. On the basis of the representations and
warranties hereinafter set forth and subject to the conditions hereinafter set
forth, the Company will sell to the Major Investors, and each Major Investor
(acting severally and not jointly) will purchase from the Company, at the
Closing on the Closing Date its Percentage Commitment of the Common Shares to be
sold to all of the Major Investors on the Closing Date, up to the full dollar
amount of the Securities set forth in Schedule A opposite its name (except as
provided therein), in each case, for a purchase price per Security equal to the
Purchase Price.
Section 2.2 Payment and Delivery. Subject to the terms and
conditions of this Agreement and on the basis of the representations and
warranties hereinafter set forth, (A) at the Closing, each Major Investor
(acting severally and not jointly) will deliver to the Company full payment of
its Purchase Price for the Securities to be purchased by it by wire transfer of
immediately available funds and (B) at the Closing, the Company shall cause each
Major Investor's name to be entered in the register of shareholders of Common
Shares against payment of its Purchase Price, and shall deliver to such Major
Investor, within three (3) business days of the Closing Date, duly executed
certificates evidencing the Securities, in each case, registered in the name of
such Major Investor (or its nominee(s) as set forth on such Major Investor's
signature page).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE MAJOR INVESTORS
Each Major Investor for itself (and not any other Major Investor)
hereby represents and warrants to the Company as of the date hereof and as of
immediately prior to the Closing on the Closing Date as follows:
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Section 3.1 Organization and Standing. The Major Investor is either
an individual or a corporation (including any similar entity formed under the
laws of a jurisdiction outside the U.S.), government instrumentality or
partnership or limited liability company taxed as a partnership for U.S. federal
income tax purposes or trust (and where such partnership or trust is not a
separate legal entity from, as the case may be, the partners or beneficiaries
thereof, the general or managing partner or trustee, as applicable, thereof is)
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization.
Section 3.2 Authorization. This Agreement has been duly authorized,
executed and delivered by the Major Investor and, assuming due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of the Major Investor enforceable against the Major Investor in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding at equity or at law).
Section 3.3 Investment Intent. The Major Investor is acquiring the
Securities for its own account or for one or more separate accounts maintained
by it or for the account of one or more pension or trust funds of which it is
trustee, in each case, for investment purposes only and not with a view to
distribution thereof, in whole or in part. If the Securities are acquired for
the account of one or more pension or trust funds, the Major Investor represents
that it is acting as sole trustee and has sole investment discretion with
respect to its acquisition of the Securities and that the determination and
decision on its behalf to acquire the Securities for such pension or trust funds
is being made by the same individual or group of individuals who customarily
pass on such investments, so that the Major Investor's decision as to
acquisitions for all such funds is the result of one study and conclusion. The
Major Investor has advised the Company in writing of its form of organization
and the accounts for which it is purchasing, as applicable, and all such
information provided to the Company is true and correct as of the date hereof.
Section 3.4 Investor Awareness. The Major Investor is aware and
agrees and acknowledges that:
(a) neither the Securities nor the underlying common shares have
been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or under any federal, foreign, state or other
jurisdiction's securities laws; the transfer thereof is restricted by the
Securities Act and applicable securities laws; and the Company is under no
obligation to, and currently does not intend to, register or qualify the
Securities for resale by the Major Investor or assist the Major Investor
in complying with any exemption under the Securities Act or the securities
laws of any such jurisdiction or any other jurisdiction. An offer or sale
directly or indirectly of Securities by the Major Investor will be subject
to the terms and provisions of this Agreement, the Certificate of
Designations with respect to the Common Shares and the Bye-laws and, in
the absence of registration under the Securities Act, will require the
availability of an exemption thereunder and an opinion of counsel of the
Major Investor that is reasonably acceptable to the Company regarding the
availability of such exemption. Subject to the Bye-laws and this
Agreement, certificates representing Securities will contain a restrictive
legend reflecting such restrictions.
(b) The Major Investor is acquiring the Securities for his or her
own account, for investment only and not with a view toward the transfer,
resale or distribution thereof in violation of any applicable securities
law.
Section 3.5 Accredited Investor. The Major Investor is, and at the
time of the offer by the Company to sell the Securities and at the time of such
Major Investor's purchase of the Securities
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will be, an "accredited investor," as that term is defined in Rule 501(a) of
Regulation D under the Securities Act (a copy of the definition of "accredited
investor" is attached hereto as Schedule B).
Section 3.6 Brokers or Finders. The Major Investor has not incurred,
nor will it incur, directly or indirectly, as a result of any action taken by
the Major Investor, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement and the
transactions contemplated hereby.
Section 3.7 Maximum Major Investor's Holdings. To the best knowledge
of the Major Investor, it is not acquiring the Securities pursuant to this
Agreement that would cause (after giving effect to the operation of Section 4.3
of the Bye-laws) the Major Investor, if a U.S. Person (as defined below), to
own, directly, indirectly or constructively, or cause another U.S. Person that
is a Beneficial Owner (as defined below) to own, directly, indirectly or
constructively, more than (i) 9.09% of the voting power of the Company's issued
and outstanding shares of stock or (ii) 24.5% of the Company's issued and
outstanding shares of stock. As used in this Section 3.7, the term "Beneficial
Owner" means any person that owns stock or warrants of the Company directly or
indirectly; references to "direct, indirect or constructive ownership" includes
ownership within the meaning of Sections 958(a) and Section 958(b) of the
Internal Revenue Code of 1986, as amended (the "Code") and references to "direct
or indirect ownership" includes ownership within the meaning of Section 958(a)
of the Code (but not Section 958(b) of the Code). The term "U.S. Person" means
(i) an individual who is a citizen or resident of the United States, (ii) a
corporation or partnership that is, as to the United States, a domestic
corporation or a domestic partnership, (iii) an estate or trust that is subject
to U.S. federal income tax on its income regardless of its source, or (iv) the
United States and the states thereof, including any of their political
subdivisions.
The Company represents and warrants to each Major Investor that, for
purposes of such Major Investor's calculation of its total percentage ownership,
the total number of Common Shares issued and outstanding as of June 30, 2007 is
59,236,096. The Company agrees that, notwithstanding any other provision of this
Agreement, no Major Investor, together with its affiliates, shall be required to
purchase securities pursuant to this Agreement which would result in such Major
Investor, together with its affiliates, owning, directly or indirectly, or
constructively, more than 24.500% of the Company's issued and outstanding shares
of stock or otherwise exceeding the ownership limitations set forth in the first
sentence of the preceding paragraph of this Section 3.7, with any Common Shares
not being purchased pursuant to this paragraph being allocated to and purchased
by the other Major Investors.
ARTICLE IV
CONDITIONS TO PURCHASE
The respective obligations of the several Major Investors to
purchase the Securities under this Agreement at the Closing are subject to the
satisfaction prior to or substantially concurrently with the Closing of each of
the following conditions:
Section 4.1 No Public Offering. The Company shall not have completed
one or more public offerings of Common Shares that provides net proceeds to the
Company of at least US$200,000,000.
Section 4.2 Talbot Acquisition. The Company shall have completed, or
shall concurrently complete, the Talbot Acquisition.
-4-
Section 4.3 No Injunction, etc. No order, injunction or decree
issued by any court or agency of competent jurisdiction or other legal restraint
or prohibition preventing the consummation of the issuance and sale of the
Securities pursuant to this Agreement shall be in effect or pending.
ARTICLE V
MISCELLANEOUS
Section 5.1 Termination. The several obligations of each Major
Investor shall terminate on the earlier of (i) consummation of one or more
public offerings of Common Shares providing net proceeds to the Company of at
least US$200,000,000 and (ii) August 15, 2007; provided that if a Closing Notice
has been duly delivered before any such termination the several obligation of
each Major Investor to purchase Securities shall continue until satisfied.
Section 5.2 NASD Matters. The Company hereby agrees (for the benefit
of each Major Investor who is affiliated with an NASD member who is or would be
an underwriter of any initial public offering of securities of the Company as
well for the benefit of each such underwriter), that to the extent the
acquisition of Common Shares hereunder would result in underwriter's
compensation to such underwriter in excess of the applicable maximum amount
permitted by NASD Rule 2710 (after discussion with the NASD staff), the Company
will endeavor to purchase, or if it cannot so purchase, cause the purchase of,
such shares so purchased hereunder at the price paid hereunder, to the extent
necessary to avoid or eliminate such excess.
Section 5.3 Other. The representations and warranties of the parties
contained in this Agreement shall survive the Closing. The parties have made no
representations or warranties other than those that are expressly set forth in
this Agreement. This Agreement (including schedules, exhibits and annexes hereto
and any other instruments delivered in connection herewith) constitutes the full
and entire understanding and agreement between the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, oral and written, between the parties hereto with respect to the
subject matter hereof. Any provision of this Agreement that is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition, unenforceability
or lack of authorization without invalidating the remaining provisions hereof or
affecting the validity, unenforceability or legality of such provision in any
other jurisdiction. Any provision of this Agreement that is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition, unenforceability
or lack of authorization without invalidating the remaining provisions hereof or
affecting the validity, unenforceability or legality of such provision in any
other jurisdiction. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors, legal representatives
and permitted assigns. Nothing in this Agreement, express or implied, is
intended to confer on any person other than the parties hereto and their
respective successors, legal representatives and permitted assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement. This
Agreement shall not be assignable by any party without the prior written consent
of each other party hereto, except that any Major Investor may assign any or all
of its rights hereunder to any affiliates to whom any of the Securities are
transferred or who are designated by such Major Investor in accordance with
Section 1.2, in each case, provided that any such transfer is in accordance with
the Bye-laws. No provision of this Agreement may be amended, waived or otherwise
modified except by an instrument in writing executed by the parties hereto. No
provision of this Agreement may be amended, waived or otherwise modified except
by an instrument in writing executed by the parties hereto. This Agreement shall
not confer any other rights to any person other than as may be expressly set
forth herein. The headings contained in this Agreement are for convenience only
and shall not affect the meaning or interpretation of this Agreement. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which
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together shall be deemed to be one and the same instrument. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
-6-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first set forth above.
VALIDUS HOLDINGS, LTD.
By:
---------------------------------------
Name:
Title:
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EXACT NAME(s) OF MAJOR INVESTOR(s) (If a trust, include both name of trust and
name of trustee; if a partnership, include both name of partnership and name of
general or managing partner. Such trustee or general managing partner will be
the registered holder.)
-----------------------------------------
(Name of trust or partnership, if and as
applicable)
-----------------------------------------
(Name of trustee or general or managing
partner, if and as applicable)
By:
------------------------------------
Name:
Title:
Address (this will appear in the Share Register):
-----------------------------------------
-----------------------------------------
Contact person:
-----------------------------------------
Telephone:
------------------------------
Fax:
------------------------------
E-mail:
------------------------------
Jurisdiction of Formation /
Country of Residence:
-----------------------------------------
Note: Natural persons or separate legal entities to be the registered holder of
the shares. A Bermuda company does not acknowledge "underlying" trusts or
beneficial interests behind the registered holder.
-8-
SCHEDULE A
SECURITIES(1)
SERIES OF
COMMON SHARES
NAME OF (INDICATE CURRENT PERCENTAGE MAXIMUM U.S. DOLLAR
MAJOR VOTING OR PRO RATA COMMITMENT OF AMOUNT OF SECURITIES TO
INVESTOR NON-VOTING) PORTION BACKSTOP(2) BE PURCHASED(3)(4)
-------- ----------- ------- --------- --------------
GSCP Non-Voting 23.7% 29.4% US$58,851,664.37
Vestar Voting 14.5% 17.9% US$35,885,169.58
Aquiline Voting 11.6% 14.4% US$28,708,137.34
New Mountain Voting 11.6% 14.4% US$28,708,133.15
Caisse de
Depot et
Placement
de Quebec Voting 9.6% 12.0% US$23,923,447.78
Xxxxxxx Non-Voting 9.6% 12.0% US$23,923,447.78
------- -----------
80.6% 100.0% US$200,000,000
--------
(1) Unless defined in the Backstop Subscription Agreement to which this is
attached, capitalized terms used in this Schedule and defined in the
Bye-laws have the meaning assigned to such term in the Bye-Laws.
(2) Represents (A) ownership of the Company based on primary shares
outstanding, divided by (B) aggregate ownership percentage of the Major
Investors based on primary shares outstanding.
(3) Assuming no Common Shares are subscribed for in any Offering by any Members
that are not Major Investors. The actual number of Common Shares purchased
will be rounded to the nearest whole number.
(4) GSCP's Percentage Commitment of Backstop is capped as contemplated in
Section 3.7.
Schedule A-1
SCHEDULE B
DEFINITION OF "ACCREDITED INVESTOR"
To be an "accredited investor," an Investor must fall within any of
the following categories at the time of the sale of any Securities to that
Investor:
- A bank as defined in Section 3(a)(2) of the Securities Act or a
savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act, whether acting in its
individual or fiduciary capacity; a broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934; an
insurance company as defined in Section 2(13) of the Securities Act;
an investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section
2(a)(48) of that act; a Small Business Investment Company licensed
by the U.S. Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958; a plan established
and maintained by a state, its political subdivisions, or any agency
or instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of
US$5,000,000; an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, if the investment
decision is made by a plan fiduciary, as defined in Section 3(21) of
that act, which is either a bank, savings and loan association,
insurance company or registered investment advisor, or if the
employee benefit plan has total assets in excess of US$5,000,000 or,
if a self-directed plan, with investment decisions made solely by
persons that are "accredited investors";
- A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
- An organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, a corporation, Massachusetts or similar
business trust or partnership, not formed for the specific purpose
of acquiring the Common Shares and with total assets in excess of
US$5,000,000;
- A director or executive officer of the Company;
- A natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of such person's purchase of the
Common Shares exceeds US$1,000,000;
- A natural person who had an individual income in excess of
US$200,000 in each of the two most recent years or joint income with
that person's spouse in excess of US$300,000 in each of those years
and has a reasonable expectation of reaching the same income level
in the current year;
- A trust, with total assets in excess of US$5,000,000, not formed for
the specific purpose of acquiring the Common Shares, whose purchase
is directed by a sophisticated person, as described in Rule
506(b)(2)(ii) of Regulation D; and
- An entity in which all of the equity owners are "accredited
investors."
Schedule B-1
As used above, the term "net worth" means the excess of total assets
over total liabilities. In computing net worth for the purpose set forth above,
the principal residence of the Investor must be valued at cost, including cost
of improvements, or at recently appraised value by an institutional lender
making a secured loan, net of encumbrances. In determining income, an Investor
should add to the Investor's adjusted gross income any amounts attributable to
tax-exempt income received, losses claimed as a limited partner in any limited
partnership, deductions claimed for depletion, contributions to an XXX or XXXXX
retirement plan, alimony payments, and any amount by which income from long-term
capital gains has been reduced in arriving at adjusted gross income.
Schedule B-2
ANNEX A
Below, for your convenience only, is a summary of certain provisions
of Bye-Law 4.1(e) of the Bye-Laws, which deals with the rights of Members to
participate in offerings of New Securities. Capitalized terms used in this Annex
have the meanings assigned to such terms in the Bye-Laws. This Annex contains a
summary of a portion of the Bye-Laws and should be read in conjunction with the
full Bye-Laws. This Annex does not form a part of and is not incorporated into
the Backstop Subscription Agreement.
4. Rights Attaching to Shares
4.1 Subject to Bye-law 2 and the Memorandum of Association, the
holders of the Common Stock shall, subject to the provisions of the
Bye-laws....
(e) have a right of first refusal (the "Preemptive Right") to
purchase any New Securities that the Company may, from time to time,
propose to issue and sell. Such Preemptive Right shall allow each
Member to purchase New Securities proposed to be issued and sold by
the Company in an amount determined in accordance with Bye-law
4.1(e)A described below.
A. In the event that the Company proposes to undertake
an issuance or sale of New Securities, it shall give each
Member written notice of its intention (the "New Issue
Notice"), describing the type and number of New Securities it
intends to issue, the purchase price therefor (which shall be
payable solely in cash by a Member), and the terms and
conditions upon which the Company proposes to issue the same.
Each Member shall have five (5) Business Days following the
date the New Issue Notice is received by such Member to
determine whether to purchase all or any portion of such New
Securities for the purchase price and upon the terms and
conditions specified in the New Issue Notice by giving written
notice to the Company (a "Preemptive Rights Notice"), stating
therein the number of New Securities such Member is
subscribing to purchase (which shall not, in any event, exceed
the number of New Securities proposed to be issued), which
Preemptive Rights Notice shall be binding on such Member. If
Members subscribe for an aggregate amount of New Securities in
excess of the number of New Securities proposed to be issued
and sold by the Company as described in the New Issue Notice,
each Member exercising its Preemptive Right will be allocated
(a) first, a number of New Securities equal to the lesser of
(x) the number of New Securities requested by such Member and
(y) such Member's Pro Rata Portion of the New Securities
proposed to be issued, and (b) second, with respect to any
remaining New Securities, a number of New Securities equal to
(x) such Member's Pro Rata Portion of such remaining New
Securities or (y) if the remaining number of New Securities
requested by such Member is less than the number in clause
(b)(x), the remaining number of New Securities requested by
such Member. The calculation in clause (b) of the preceding
sentence shall be repeated as necessary until all New
Securities have been allocated. Each Member that on the date
of such New Issue Notice owns Non-Voting Common Stock shall be
entitled at its option to receive any New Securities it may
purchase pursuant to a Preemptive Right in the form of a
non-voting security, which security shall be identical to the
New Securities except that such security shall have rights
substantially similar to those set forth in Bye-law 4.1A, with
such other changes as are appropriate to make such non-voting
security substantially identical to the
Annex A-1
New Securities. Any such non-voting security shall have
provisions to convert such security to a voting security
otherwise substantially ide t 18 ntical thereto, which
conversion provisions shall be substantially identical to the
conversion provisions contained in Bye-law 4.1C and 4.1D.
References in this Bye-law 4.1(e) to "New Securities" shall
include such non-voting securities, to the extent applicable.
For the avoidance of doubt, the Company shall not be under any
obligation to issue or sell any of the New Securities proposed
to be issued or sold in any New Issue Notice.
B. If the Members have not agreed to purchase all or any
portion of the New Securities to be issued in accordance with
the terms of any New Issue Notice and the provisions of
Bye-law 4.1(e)(A), then the Company shall have the right to
issue and sell all such New Securities not agreed to be
purchased by the Members pursuant to Bye-law 4.1(e)(A) (the
"Remaining New Securities") at a price no less than that
contained in the New Issue Notice and on non-price terms no
less favorable (taken as a whole) to the Company than those
contained in the New Issue Notice; provided that (i) the
Company has fully complied with the provisions of Bye-law
4.1(e) and (ii) such issuance and sale of Remaining New
Securities is consummated by the Company within 90 days after
the sending of the New Issue Notice to the Members pursuant to
Bye-law 4.1(e)(A) hereof, provided that, if such issue is
subject to regulatory approval, such 90-day period shall be
extended until the expiration of five (5) business days after
such approvals have been received, but in no event later than
180 days from the date of the New Issue Notice. In the event
that the issuance and sale of the Remaining New Securities is
not fully consummated by the Company prior to the end of such
period, the provisions of Bye-law 4.1(e) must be again be
complied with by the Company before the Company may issue or
sell any additional New Securities.
C. Notwithstanding anything contained in Bye-law
4.1(e) to the contrary, the purchase price for any New
Security shall be determined by the Board.
D. This Bye-law 4.1(e) shall terminate upon the
First Public Offering.
Annex A-2
