Exhibit 10(v)

 

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October 21, 2016

Capital Z Financial Services Fund II, L.P. and

Capital Z Financial Services Private Fund II, L.P.

c/o Capital Z Partners, Ltd.

142 West 57th Street, 3rd Floor

New York, New York 10019

Attn:  Bradley E. Cooper

Re:

Purchase of Common Stock

Ladies and Gentlemen:

NewStar Financial, Inc. (the “Buyer”) hereby irrevocably subscribes for and
agrees to purchase an aggregate of two million (2,000,000) shares of Common
Stock, par value $0.01 per share (the “Securities”) of the Buyer from Capital Z
Financial Services Fund II, L.P. (“Fund II”) and Capital Z Financial Services
Private Fund II, L.P. (“Private Fund II”, and together with Fund II, the
“Sellers” and, the Sellers together with the Buyer, the “Parties”).  The Buyer
shall purchase 1,989,402 shares of the Securities from Fund II and 10,598 shares
of the Securities from Private Fund II, in each case, pursuant to the
representations, warranties and agreements set forth in this letter agreement
(this “Agreement”) and subject to the terms and conditions set forth below (the
“Transaction”). The Buyer acknowledges that this Agreement is subject to
acceptance by the Sellers.

Purchase Price

The Buyer and the Sellers agree that the aggregate consideration payable for the
Securities is $17,860,000, with $17,765,360 payable to Fund II and $94,640
payable to Private Fund II, in each case, in the manner agreed by the Parties.
The wire instructions for each of the Sellers is as set forth on Exhibit A
hereto.  The Sellers will each deliver the Securities to the Buyer in the manner
agreed by the Parties. The Transaction will close as soon as practicable after
the full execution of this Agreement by the Parties, but not later than five
days after the full execution of this Agreement.

 

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Capital Z Financial Services Fund II, L.P.

Capital Z Financial Services Private Fund II, L.P.
October 21, 2016
Page 2

 

Indemnification

In connection with the Transaction, the Buyer will deliver a Letter of
Indemnification Supplemental to Medallion Signature Guarantee (the “Company
Letter”) signed by the Buyer on or about the date hereof, in favor of American
Stock Transfer & Trust Company, LLC, the Company’s transfer agent (the “Transfer
Agent”), in connection with the Transaction.

In consideration of the Buyer issuing the Company Letter, each of the Sellers
hereby jointly and severally agree to unconditionally, absolutely and
irrevocably indemnify, defend and hold harmless the Buyer and its officers,
directors, managers, partners, shareholders, employees, agents, representatives
and affiliates from any claims, damages, liabilities, costs or losses to which
such persons may become subject as a result of the Company Letter, to the
fullest extent permitted by applicable law.

Sellers’ Representations, Warranties, Acknowledgments and Agreements

Each of the Sellers hereby represents, warrants, acknowledges and agrees on
behalf of itself for the benefit of the Buyer as follows:

1. such Seller (i) has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits, risks and suitability of the
Transaction, and (ii) is consummating the Transaction with a full understanding
of all of the terms, conditions and risks and willingly assumes those terms,
conditions and risks;

2. such Seller is authorized to consummate the Transaction;

3. such Seller is authorized to enter into this Agreement, and to execute and
deliver all other documents required in connection with the Transaction.  

4. the endorsement of Roland Bernardon, Chief Financial Officer, affixed to the
presented security, stock power or other documentation and delivered to the
Transfer Agent in connection with the Transaction (a copy of which is attached
hereto as Annex A) is genuine, that the endorser is the appropriate person to
sign on behalf of the applicable Seller (individually or as a qualified officer
or other designated signatory on behalf of its general partner or otherwise) and
that the endorser has the legal capacity to authorize the Transaction.

5. upon completion of the Transaction, the Buyer will receive good and
marketable title to the Securities sold by such Seller, free and clear of any
encumbrance, lien, claim, charge, security interest or other interests;

 

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Capital Z Financial Services Fund II, L.P.

Capital Z Financial Services Private Fund II, L.P.
October 21, 2016
Page 3

 

6. such Seller has received and carefully reviewed the Buyer’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2015, all subsequent public
filings of the Buyer with the Securities and Exchange Commission (including its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016 and June
30, 2016, and its Current Reports on Form 8-K filed since January 1, 2016),
other publicly available information regarding the Buyer, and such other
information that it and its advisers deem necessary to make its decision to
enter into the Transaction;

7. such Seller has evaluated the merits and risks of the Transaction based
exclusively on its own independent review and consultations with such
investment, legal, tax, accounting and other advisers as it deemed necessary.
Such Seller has made its own decision concerning the Transaction without
reliance on any representation or warranty of, or advice from, the Buyer;

8. neither the Buyer nor any of its affiliates, principals, stockholders,
partners, employees and agents (collectively, the “Buyer Parties”) has been
requested to or has provided such Seller with any information or advice with
respect to the Buyer or the Securities nor is such information or advice
necessary or desired, and except as expressly set forth in this Agreement,
neither the Buyer nor any other Buyer Party has made or makes any representation
or warranty, express or implied, as to the Buyer, the Securities or any aspect
of the Transaction, and such Seller disclaims the existence of and its reliance
on any such representation or warranty;

9. such Seller acknowledges and understands that the Buyer and the other Buyer
Parties may possess material nonpublic information regarding the Buyer not known
to such Seller (the “Information”) that may impact the value of the Securities,
including information that may be indicative that the value of the Securities is
substantially different than the purchase price being paid for the Securities in
the Transaction, and that the Buyer may be unable to disclose the Information to
such Seller. Such Seller understands, based on its experience, the disadvantage
to which such Seller is subject due to the disparity of information between the
Buyer and such Seller.  Notwithstanding such disparity, such Seller has deemed
it appropriate to enter into this Agreement and to consummate the Transaction.
Such Seller is not relying on any disclosure or non-disclosure made or not made,
or the completeness thereof, in connection with or arising out of the sale of
the Securities, and therefore has no claim against the Buyer or any other Buyer
Party;

10. if any such claim may exist, such Seller, recognizing its disclaimer of
reliance and the Buyer’s reliance on such disclaimer as a condition to entering
into the Transaction, covenants and agrees not to assert it against the Buyer or
any other Buyer Party, and such Seller hereby releases the Buyer and each of the
other Buyer Parties from any liability to such Seller, its affiliates,
principals, stockholders, partners, employees, agents, grantors or
beneficiaries, whatsoever due to or in connection with the Buyer’s use or
non-disclosure of the Information or otherwise as a result of the Transaction,
and such Seller hereby irrevocably waives any claim that it might have based on
the failure of the Buyer or any other Buyer Party to disclose the Information;
and

 

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Capital Z Financial Services Fund II, L.P.

Capital Z Financial Services Private Fund II, L.P.
October 21, 2016
Page 4

 

11. other than the Transaction, since the beginning of the tenth full trading
day prior to the execution of this Agreement, neither such Seller nor any of its
affiliates, nor any person acting on its or their behalf or acting in concert
with or at the direction of any of them, has bid for, purchased, or attempted to
induce any person to bid for or purchase, any shares of the Buyer’s Common
Stock.

Buyer’s Representations, Warranties, Acknowledgments and Agreements

The Buyer hereby represents, warrants, acknowledges and agrees for the benefit
of each of the Sellers as follows:

1. the Buyer (i) has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits, risks and suitability of the
Transaction, and (ii) is consummating the Transaction with a full understanding
of all of the terms, conditions and risks and willingly assumes those terms,
conditions and risks;

2. the Buyer is authorized to consummate the Transaction;

3. the Buyer is authorized to enter into this Agreement;

4. the Buyer has evaluated the merits and risks of the Transaction based
exclusively on its own independent review and consultations with such
investment, legal, tax, accounting and other advisers as it deemed necessary.
The Buyer has made its own decision concerning the Transaction without reliance
on any representation or warranty of, or advice from, the Sellers; and

5. neither of the Sellers nor any of its affiliates, principals, stockholders,
partners, employees and agents (i) has been requested to or has provided the
Buyer with any information or advice with respect to the Securities nor is such
information or advice necessary or desired, or (ii) has made or makes any
representation as to the Buyer or the Securities, other than as expressly set
forth herein.

Buyer’s Reliance

The Sellers each acknowledge that (i) the Buyer is relying on such Seller’s
representations, warranties, acknowledgments and agreements in this Agreement as
a condition to proceeding with the Transaction; and (ii) without such
representations, warranties and agreements, the Buyer would not enter into this
Agreement or engage in the Transaction.

Other Agreements of the Parties

All of the representations, warranties and agreements of each party hereto shall
survive the closing date of the Transaction. This Agreement (i) shall constitute
the binding agreement of the Parties with respect to the subject matter hereof;
(ii) shall constitute the sole and entire agreement of the Parties, and
supersedes all prior and contemporaneous understandings, agreements,
representations and warranties, both written and oral, with respect to the
subject matter of this Agreement; and (iii) may be executed in counterparts,
each of which shall be deemed an original,

 

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Capital Z Financial Services Fund II, L.P.

Capital Z Financial Services Private Fund II, L.P.
October 21, 2016
Page 5

 

including by facsimile, e-mail or other means of electronic transmission of
executed counterparts, which together shall constitute one and the same
agreement. In addition: (a) all costs and expenses incurred in connection with
this Agreement and the Transaction shall be paid by the Party incurring such
costs and expenses, whether or not the Transaction is consummated; (b) each of
the Parties shall execute and deliver such additional documents, instruments,
conveyances and assurances and take such further actions as may be reasonably
required to carry out the provisions of this Agreement and give effect to the
Transaction; (c) if any term or provision of this Agreement is invalid, illegal
or unenforceable in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other term or provision of this Agreement
or invalidate or render unenforceable such term or provision in any other
jurisdiction; (d) this Agreement may only be amended, modified or supplemented
by an agreement in writing signed by each Party; (e) no waiver by any Party of
any of the provisions of this Agreement shall be effective unless explicitly set
forth in writing and signed by the Party so waiving; (f) neither party may
assign any of its rights or delegate any of its obligations under this Agreement
without the prior written consent of the other party; and (g) this Agreement
shall be binding upon and shall inure to the benefit of the Parties and their
permitted successors and assigns.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any choice of conflict of law provision or rule (whether of the State
of New York or any other jurisdiction).

 

 

 

 

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Please sign a copy of this Agreement and return a copy by facsimile or e-mail
and the original by mail/courier to the undersigned. If the Buyer does not
receive the Sellers’ signed counterpart of this Agreement by 5:00 P.M. ET on
October 21, 2016, the Buyer’s offer to purchase the Securities shall be
rescinded, and this Agreement shall immediately terminate and be of no further
effect.

 

 

 

Very truly yours,

 

 

 

 

 

NEWSTAR FINANCIAL, INC.

 

 

 

 

 

By:

 

/s/ Robert K. Brown

 

 

Name:

 

Robert K. Brown

 

 

Title:

 

Managing Director

 

 

 

CAPITAL Z FINANCIAL SERVICES

FUND II, L.P.

 

 

 

 

 

By: Capital Z Partners, L.P., its general partner

 

 

 

 

 

By: Capital Z Partners, Ltd.

 

 

 

 

 

 

 

By:

 

/s/ Craig Fisher

 

 

Name:

 

Craig Fisher

 

 

Title:

 

General Counsel

 

 

 

 

 

 

 

CAPITAL Z FINANCIAL SERVICES

PRIVATE FUND II, L.P.

 

 

 

 

 

By: Capital Z Partners, L.P., its general partner

 

 

 

 

 

By: Capital Z Partners, Ltd.

 

 

 

 

 

 

 

By:

 

/s/ Craig Fisher

 

 

Name:

 

Craig Fisher

 

 

Title:

 

General Counsel