Exhibit 10.01

 

 

 

 

 

 

 

                                                                                                                                               

 

PRIMUS GUARANTY, LTD. SHAREHOLDERS AGREEMENT

 

 

 

 

Dated as of December 30, 2010

                                                                                                                                               

 

               

 

 

 

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TABLE OF CONTENTS

 

 

Page Article I
GOVERNANCE.....................................................................................................................................................
1 Section 1.1         Composition of the Board of
Directors....................................................................................
1 Section 1.2 Subsequent Composition of the Board of Directors Following the
Closing
Date......................................................................................................................................
1   Section 1.3 Objection to an Investor
Designee..........................................................................................
3 Section 1.4 Adjustments for Reduced Board
Membership.........................................................................
3 Section 1.5 Termination of Investor
Rights.................................................................................................
3 Article II TRANSFERS; STANDSTILL
PROVISIONS........................................................................................................
4 Section 2.1 Transfer
Restrictions...............................................................................................................
4 Section 2.2 Standstill
Provisions................................................................................................................
5   Article III REPRESENTATIONS AND
WARRANTIES.........................................................................................................
7 Section 3.1 Representations and Warranties of the
Investors.......................................................................
7 Section 3.2 Representations and Warranties of
EBF...................................................................................
8 Section 3.3 Representations and Warranties of the
Company...................................................................... 8
Article IV
REGISTRATION....................................................................................................................................................
9 Section 4.1 Piggyback
Registrations..........................................................................................................
9 Section 4.2 Shelf
Registration....................................................................................................................
10 Section 4.3 Demand
Registration...............................................................................................................
11 Section 4.4 NYSE Listing and Registration with the
Commission................................................................ 12
Section 4.5 Registration
Procedures..........................................................................................................
12 Section 4.6 Registration
Expenses.............................................................................................................
15 Section 4.7 Participation in Underwritten
Registrations...............................................................................
15 Section 4.8 Suspension of
Sales................................................................................................................
15 Section 4.9 Rule 144; Legended
Securities................................................................................................
16 Section 4.10
Holdback...............................................................................................................................
16 Section 4.11 Delay of Registration; Furnishing
Information...........................................................................
16 Article V PREEMPTIVE
RIGHTS...........................................................................................................................................
16 Section 5.1 Preemptive
Rights....................................................................................................................
16 Article VI
DEFINITIONS.........................................................................................................................................................
17 Section 6.1 Defined
Terms.........................................................................................................................
17 Section 6.2 Terms
Generally.......................................................................................................................
21 Article VII
MISCELLANEOUS.................................................................................................................................................
22 Section 7.1
Term........................................................................................................................................
22 Section 7.2 No Inconsistent
Agreements.....................................................................................................
22 Section 7.3
Confidentiality..........................................................................................................................
22

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Section 7.4        Investment Opportunities; Conflicts of
Interest..........................................................................
22 Section 7.5 Investor
Actions......................................................................................................................
23 Section 7.6 Amendments and
Waivers.......................................................................................................
23 Section 7.7 Successors and
Assigns...........................................................................................................
23 Section 7.8
Severability.............................................................................................................................
23 Section 7.9
Counterparts...........................................................................................................................
23 Section 7.10 Entire
Agreement....................................................................................................................
23 Section 7.11 Governing Law;
Jurisdiction.....................................................................................................
24 Section 7.12 WAIVER OF JURY
TRIAL..................................................................................................
24 Section 7.13 Specific
Performance..............................................................................................................
24 Section 7.14 No Third Party
Beneficiaries....................................................................................................
24 Section 7.15
Notices...................................................................................................................................
24 Annex A  Form of Joinder Annex B  Investor Ownership

 

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SHAREHOLDERS AGREEMENT, dated as of December 30, 2010 (as it may be amended from
time to time, this “Agreement”), by and among (i) PRIMUS GUARANTY, LTD., a
Bermuda company (the “Company”), (ii) MERCED PARTNERS LIMITED PARTNERSHIP, a
Delaware limited partnership (“First MP”), (iii) MERCED PARTNERS III (Cayman),
L.P., a Cayman exempted limited partnership (“Second MP” and together with First
MP and any Permitted Transferees, the “Investors”) and (iv) EBF & ASSOCIATES,
L.P., a Delaware limited partnership (“EBF”).

W I T N E S S E T H:

 

WHEREAS, on December 20, 2010, the total equity capitalization of the Company
consisted of 37,958,622 common shares, par value $0.08 each (the “Common
Shares”), issued and outstanding;

WHEREAS, on the date hereof, XL Insurance (Bermuda) Ltd, a Bermuda exempted
company (“Seller”) and First MP and Second MP have entered into a Share Purchase
Agreement (as it may be amended from time to time, the “Purchase Agreement”)
pursuant to which First MP and Second MP are acquiring from Seller, subject to
the terms and conditions thereof, 11,266,000 Common Shares (the “Acquired
Shares”), for an aggregate purchase price of $51,598,280; and

WHEREAS, each of the parties hereto wishes to set forth in this Agreement
certain terms and conditions regarding the Investors’ ownership of the Acquired
Shares.

NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained in this Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties agree as
follows:

ARTICLE I
GOVERNANCE

Section 1.1            Composition of the Board of Directors. Effective on the
Closing, (i) the Company will cause the two Investor Designees to become members
of the Board and (ii) the Company will cause the number of directors on the
Company’s board of directors (the “Board”) to be increased by two. The initial
Investor Directors shall be (i) Vince Vertin, as a Class II Director, and (ii)
Mike Sullivan, as a Class III Director. Effective on the Closing, the Company
will cause Vince Vertin to be appointed as a member of the Finance, Investment
and Risk Committee of the Board (the “Finance Committee”).

Section 1.2            Subsequent Composition of the Board of Directors
Following the Closing Date. (a) Following the Closing Date, subject to
compliance with Section 1.2(c), at each annual or special general meeting of
shareholders of the Company at which directors are to be elected to the
Company’s Board, the Company will nominate and use its reasonable best efforts
to cause the election to the Company’s Board of a slate of directors that
includes, (i) if the Investor Percentage Interest equals or exceeds 50.0% (the
“First Threshold”), two Investor Designees, reduced by the number of Investor
Directors then in office, if any, who will continue as directors

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of the Company following such election because their director class, if then
applicable, is not then due for election or (ii) if the Investor Percentage
Interest is less than the First Threshold but equals or exceeds 25.0% (the
“Second Threshold”), one Investor Designee, reduced by the number of Investor
Directors then in office, if any, who will continue as directors of the Company
following such election because their director class, if then applicable, is not
then due for election.  If the Investor Percentage Interest is less than the
Second Threshold, the Company will be under no obligation to nominate or
otherwise act to cause the appointment of any Investor Designee.

(B)               UNTIL SUCH TIME AS THE INVESTOR PERCENTAGE INTEREST IS LESS
THAN THE SECOND THRESHOLD, EACH INVESTOR AGREES TO CAUSE EACH ACQUIRED SHARE
BENEFICIALLY OWNED BY IT TO BE PRESENT IN PERSON OR REPRESENTED BY PROXY AT ALL
MEETINGS OF SHAREHOLDERS OF THE COMPANY AT WHICH DIRECTORS ARE TO BE ELECTED TO
THE BOARD, SO THAT EACH SUCH ACQUIRED SHARE SHALL BE COUNTED AS PRESENT FOR
DETERMINING THE PRESENCE OF A QUORUM AT SUCH MEETINGS AND TO SUPPORT AND CAUSE
EACH SUCH ACQUIRED SHARE TO BE VOTED IN FAVOR OF THE INVESTOR DESIGNEE AND THOSE
PERSONS (AND ONLY THOSE PERSONS) NOMINATED BY THE BOARD OR THE RELEVANT
COMMITTEE THEREOF. NOTWITHSTANDING THE FOREGOING, THE INVESTORS SHALL HAVE NO
OBLIGATION TO VOTE IN FAVOR OF THOSE PERSONS NOMINATED BY THE BOARD OR THE
RELEVANT COMMITTEE THEREOF IN THE EVENT THAT (I) THE ELECTION OF SUCH PERSON TO
THE BOARD WOULD CAUSE THE COMPANY TO BE NOT IN COMPLIANCE WITH APPLICABLE LAW,
OR (II) SUCH PERSON HAS BEEN INVOLVED IN ANY OF THE EVENTS ENUMERATED IN ITEM
2(D) OR (E) OF SCHEDULE 13D OR ITEM 401(F) OF REGULATION S-K.

(C)                THE INVESTORS SHALL NOTIFY THE COMPANY OF THE IDENTITY OF THE
PROPOSED INVESTOR DESIGNEES, IN WRITING, TOGETHER WITH ALL INFORMATION ABOUT THE
PROPOSED INVESTOR DESIGNEES AS SHALL BE REASONABLY REQUESTED BY THE BOARD OR THE
RELEVANT COMMITTEE THEREOF NO LATER THAN TEN (10) DAYS AFTER THE BOARD OR THE
RELEVANT COMMITTEE THEREOF GIVES THE INVESTORS NOTICE REQUESTING SUCH
INFORMATION FOR INCLUSION IN A PROXY STATEMENT FOR A MEETING OF SHAREHOLDERS;
PROVIDED, HOWEVER, THAT IN THE EVENT THE INVESTORS FAIL TO PROVIDE SUCH NOTICE
FOLLOWING THE DELIVERY OF SUCH NOTICE BY THE BOARD OR A COMMITTEE THEREOF, THE
PERSONS THEN SERVING AS THE INVESTOR DIRECTORS SHALL BE DEEMED TO BE THE
INVESTOR DESIGNEES FOR SUCH MEETING.

(D)               IN THE EVENT OF THE DEATH, DISABILITY, RESIGNATION OR REMOVAL
OF AN INVESTOR DIRECTOR (OTHER THAN PURSUANT TO SECTION 1.5), THE BOARD WILL
PROMPTLY APPOINT TO THE BOARD A REPLACEMENT INVESTOR DIRECTOR DESIGNATED IN
WRITING BY THE INVESTORS TO FILL THE RESULTING VACANCY, AND SUCH INDIVIDUAL
SHALL THEN BE DEEMED AN INVESTOR DIRECTOR FOR ALL PURPOSES HEREUNDER; PROVIDED
THAT IF AN INVESTOR DIRECTOR IS REMOVED FOR CAUSE, THE REPLACEMENT INVESTOR
DIRECTOR WILL NOT BE THE SAME PERSON WHO WAS REMOVED.

(E)                IN THE EVENT AN INVESTOR DESIGNEE FAILS TO BE ELECTED TO THE
BOARD FOLLOWING ANY ANNUAL OR SPECIAL GENERAL MEETING OF THE SHAREHOLDERS AT
WHICH THE INVESTOR DESIGNEE STOOD FOR ELECTION BUT WAS NEVERTHELESS NOT ELECTED,
THE COMPANY WILL PROMPTLY, AND IN ANY EVENT NOT LATER THAN THREE (3) DAYS
FOLLOWING SUCH MEETING OF THE SHAREHOLDERS, APPOINT A REPLACEMENT INVESTOR
DIRECTOR DESIGNATED IN WRITING BY THE INVESTORS TO THE BOARD EITHER BY EXPANDING
THE SIZE OF THE BOARD OR CAUSING A NON-INVESTOR DIRECTOR TO RESIGN, AND SUCH
INDIVIDUAL SHALL THEN BE DEEMED AN INVESTOR DIRECTOR FOR ALL PURPOSES
HEREUNDER.  WITHOUT THE PRIOR WRITTEN CONSENT OF THE INVESTORS, THE BOARD SHALL
TAKE NO ACTION UNTIL SUCH TIME AS THE REPLACEMENT INVESTOR DESIGNEE IS SO
APPOINTED.

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(F)                THE INVESTORS AGREE THAT THE INVESTOR DIRECTORS SHALL WAIVE
ALL RIGHTS TO COMPENSATION FOR THEIR SERVICE ON THE BOARD OTHER THAN (I) THE
INDEMNIFICATION RIGHTS GENERALLY PROVIDED TO DIRECTORS OF THE COMPANY AND (II)
REASONABLE EXPENSES INCURRED BY SUCH DIRECTORS IN CONNECTION WITH THEIR
ATTENDANCE AT MEETINGS OF THE BOARD AND ITS COMMITTEES, WHICH EXPENSES SHALL BE
REIMBURSED ONLY IN SUCH AMOUNTS AS ARE CONSISTENT WITH THE COMPANY’S POLICIES
WITH RESPECT TO DIRECTOR EXPENSE REIMBURSEMENT. 

(G)               THE BOARD SHALL CAUSE THE INVESTOR DIRECTOR AS SPECIFIED BY
THE INVESTORS FROM TIME TO TIME TO BE APPOINTED TO AND TO REMAIN AS A MEMBER OF
THE FINANCE COMMITTEE.  FOR AS LONG AS ANY MEMBERS OF THE BOARD ARE ALSO
DIRECTORS OF THE BOARD OF PRIMUS FINANCIAL PRODUCTS, LLC (“PFP”), THE COMPANY
SHALL CAUSE ONE INVESTOR DIRECTOR, AS SPECIFIED BY THE INVESTORS FROM TIME TO
TIME, TO BE APPOINTED TO AND REMAIN AS A MEMBER OF THE BOARD OF PFP.

              Section 1.3            Objection to an Investor Designee.
Notwithstanding the provisions of this Article I, the Investors will not be
entitled to designate an Investor Designee to the Board (or any committee
thereof), in the event that (i) the election of such Investor Designee to the
Board would cause the Company to be not in compliance with Applicable Law, (ii)
such Investor Designee has been involved in any of the events enumerated in Item
2(d) or (e) of Schedule 13D or Item 401(f) of Regulation S-K, or (iii) such
Investor Designee is not reasonably acceptable to the Board or the relevant
committee thereof. In any such case described in clauses (i), (ii) or (iii) of
the immediately preceding sentence, the Investors will withdraw the designation
of such proposed Investor Designee and designate a replacement therefor (which
replacement Investor Designee will also be subject to the requirements of this
Section 1.3). The Company will notify the Investors of any objection (together
with the basis thereof in reasonable detail) to an Investor Designee
sufficiently in advance of the date on which proxy materials are mailed by the
Company in connection with such election of directors to enable the Investors to
submit a replacement Investor Designee or Investor Designees, as the case may
be, in accordance with the terms of this Agreement. The Company agrees that this
Section 1.3 shall not be a basis for objecting to the Investor Designees
specified in Section 1.1 with respect to their initial service as directors but
may apply with any re-election or reappointment of such persons.
 

Section 1.4            Adjustments for Reduced Board Membership. If, at any
time, the number of seats on the Board is reduced to six or fewer, then (a) the
number of Investor Designees to be nominated by the Company pursuant to clause
(i) of Section 1.2(a) will be reduced to one and (b) if at such time there are
two Investor Directors on the Board, the Investors cause one Investor Director
to promptly resign from the Board such that promptly following such resignation
there is one Investor Director on the Board.

Section 1.5            Termination of Investor Rights. If as of the close of any
Business Day following the Closing Date, the Investor Percentage Interest has
fallen below the First Threshold, the Investors shall promptly notify the
Company and, unless otherwise consented to by a majority of the non-Investor
Directors on the Board, the Investors shall cause one Investor Director to
promptly resign from the Board such that promptly following such resignation
there is one Investor Director on the Board. If as of the close of any Business
Day following the Closing Date, the Investor Percentage Interest falls below the
Second Threshold, the Investors shall promptly notify the Company and, unless
otherwise consented to by a majority of the non-Investor Directors on the Board,
the Investors shall cause the remaining Investor Director to

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promptly resign from the Board such that immediately following such resignation
no Investor Directors remain on the Board.  Immediately upon the Investor
Percentage Interest falling below the Second Threshold and without relieving the
Company of any prior breach hereof, the Company shall have no further obligation
pursuant to this Article I to nominate or appoint Investor Designees.

ARTICLE II
TRANSFERS; STANDSTILL PROVISIONS

Section 2.1            Transfer Restrictions. (a) No Investor shall Transfer any
of the Acquired Shares prior to the six-month anniversary of the Closing Date,
other than to a Permitted Transferee. In the event that prior to the six-month
anniversary of the Closing Date, any Permitted Transferee ceases to be a
Controlled Affiliate of the transferring Investor, then any prior Transfer to
such Person pursuant to such exception shall become null and void and ownership
and title to any such securities so Transferred shall revert to such
transferring Investor. An Investor shall notify the Company prior to any
transfer to a Permitted Transferee during such six-month period.

(B)               FROM AND AFTER THE SIX-MONTH ANNIVERSARY OF THE CLOSING DATE,
THE INVESTORS SHALL NOT TRANSFER ANY ACQUIRED SHARES EXCEPT IN COMPLIANCE WITH
THE RESTRICTIONS ON TRANSFER GENERALLY APPLICABLE TO HOLDERS OF THE COMMON
SHARES; PROVIDED, HOWEVER, THAT TRANSFER OF ACQUIRED SHARES FOLLOWING THE
SIX-MONTH ANNIVERSARY OF THE CLOSING DATE SHALL NOT, IN AND OF ITSELF, BE DEEMED
TO RESULT IN AN ADVERSE REGULATORY OR LEGAL CONSEQUENCE TO THE COMPANY UNDER
CLAUSE 13.1 OF THE COMPANY’S BYE-LAWS (THE “BYE-LAWS”).

(C)                THE FOREGOING RESTRICTIONS ON TRANSFER MAY BE WAIVED WITH
RESPECT TO ANY SPECIFIC TRANSFER BY THE PRIOR APPROVAL OF A MAJORITY OF THE
MEMBERS OF THE BOARD WHO ARE NOT INVESTOR DIRECTORS.

(D)               ANY TRANSFER OR ATTEMPTED TRANSFER OF ACQUIRED SHARES IN
VIOLATION OF THIS SECTION 2.1 SHALL, TO THE FULLEST EXTENT PERMITTED BY LAW, BE
NULL AND VOID AB INITIO, AND THE COMPANY SHALL NOT, AND SHALL INSTRUCT ITS
TRANSFER AGENT AND OTHER THIRD PARTIES NOT TO, RECORD OR RECOGNIZE ANY SUCH
PURPORTED TRANSACTION ON THE SHARE REGISTER OF THE COMPANY.

(E)                ANY CERTIFICATES FOR ACQUIRED SHARES SHALL BEAR A LEGEND OR
LEGENDS (AND APPROPRIATE COMPARABLE NOTATIONS OR OTHER ARRANGEMENTS WILL BE MADE
WITH RESPECT TO ANY UNCERTIFICATED SHARES) REFERENCING RESTRICTIONS ON TRANSFER
OF SUCH ACQUIRED SHARES UNDER THE SECURITIES ACT, WHICH LEGEND SHALL STATE IN
SUBSTANCE:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ISSUED AND SOLD WITHOUT
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES (A
“STATE ACT”) IN RELIANCE UPON CERTAIN EXEMPTIONS FROM REGISTRATION UNDER SAID
ACTS.  THE SECURITIES EVIDENCED BY THIS CERTIFICATE CANNOT BE SOLD, ASSIGNED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES UNLESS SUCH SALE, ASSIGNMENT OR
OTHER TRANSFER IS (I) MADE PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH EACH APPLICABLE STATE
ACT OR (II) EXEMPT FROM, OR NOT SUBJECT TO, THE SECURITIES ACT AND EACH
APPLICABLE STATE ACT.

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Notwithstanding the foregoing, the holder of any certificate(s) for Acquired
Shares shall be entitled to receive from the Company new certificates for a like
number of Acquired Shares not bearing such legend (or the elimination or
termination of such notations or arrangements) upon the request of such holder
(i) at such time as such restrictions are no longer applicable, and (ii) if
required by the Company’s transfer agent, with respect to the restriction on
transfer of such shares other than pursuant to a Registration Statement under
the Securities Act, upon delivery of an opinion of counsel to such holder, which
opinion is reasonably satisfactory in form and substance to such transfer agent,
that the securities law restriction referenced in such legend is no longer
required in order to ensure compliance with the Securities Act.

 

(F)                THE COMPANY WILL CAUSE THE ACQUIRED SHARES TO BE REGISTERED
IN THE NAME OF THE INVESTORS AS RECORD OWNERS PROMPTLY FOLLOWING THE CLOSING.

Section 2.2            Standstill Provisions. During the Standstill Period, the
Investors and EBF shall not, and shall not permit any Investment Fund, directly
or indirectly, to, without the Company’s prior written consent:

(A)                ACQUIRE OR AGREE TO ACQUIRE ANY ADDITIONAL COMMON SHARES, OR
ANY OTHER SECURITIES OR ASSETS OF THE COMPANY;

(B)               FORM A GROUP OR DEPOSIT THE ACQUIRED SHARES IN A VOTING TRUST;

(C)                GRANT ANY PROXY TO VOTE ANY ACQUIRED SHARES TO ANY PERSON OR
GROUP, OTHER THAN THE COMPANY OR A PERSON SPECIFIED BY THE COMPANY IN A PROXY
CARD PROVIDED TO ALL SHAREHOLDERS OF THE COMPANY ON OR ON BEHALF OF THE COMPANY;

(D)               PROPOSE (A) ANY MERGER, CONSOLIDATION OR OTHER BUSINESS
COMBINATION WITH THE COMPANY, (B) ANY PURCHASE OF ALL OR SUBSTANTIALLY ALL OF
THE ASSETS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, (C) ANY RECAPITALIZATION,
RESTRUCTURING, LIQUIDATION, OR DISSOLUTION OF THE COMPANY OR (D) ANY OTHER
EXTRAORDINARY TRANSACTION WITH RESPECT TO THE COMPANY OR ANY OF ITS SUBSIDIARIES
(EACH OF THE FOREGOING, AN “EXTRAORDINARY TRANSACTION”);

(E)                MAKE A TENDER OR EXCHANGE OFFER FOR ANY SECURITIES OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES;

(F)                PARTICIPATE IN ANY “SOLICITATION” OF “PROXIES” (AS SUCH TERMS
ARE USED IN THE PROXY RULES OF THE COMMISSION) TO VOTE, OR KNOWINGLY SEEK TO
ADVISE OR INFLUENCE ANY PERSON WITH RESPECT TO THE VOTING OF, ANY VOTING
SECURITIES OF THE COMPANY;

(G)               CALL, OR SEEK TO CALL, A MEETING OF THE SHAREHOLDERS OF THE
COMPANY OR INITIATE ANY SHAREHOLDER PROPOSAL FOR ACTION BY SHAREHOLDERS OF THE
COMPANY, SEEK BOARD REPRESENTATION OTHER THAN AS PROVIDED FOR IN THIS AGREEMENT
OR SEEK THE REMOVAL OF ANY MEMBER OF THE BOARD;

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(H)               OTHERWISE ACT, ALONE OR IN CONCERT WITH OTHERS, TO SEEK TO
CONTROL OR INFLUENCE THE MANAGEMENT OR THE POLICIES OF THE COMPANY;

(I)                 PUBLICLY DISCLOSE ANY INTENTION, PLAN OR ARRANGEMENT
PROHIBITED BY THIS SECTION 2.2, OTHER THAN NONPUBLIC COMMUNICATION;

(J)                 KNOWINGLY ADVISE, ASSIST OR ENCOURAGE ANY PERSONS ENGAGED IN
ANY OF THE ACTIVITIES PROHIBITED BY THIS SECTION 2.2; 

(K)               REQUEST THE COMPANY TO WAIVE ANY PROVISION OF THIS SECTION
2.2, OR

(L)                 TAKE ANY OTHER ACTION THAT SUCH PERSON REASONABLY BELIEVES
WILL REQUIRE THE COMPANY TO MAKE A PUBLIC ANNOUNCEMENT REGARDING THE POSSIBILITY
OF A BUSINESS COMBINATION, MERGER OR OTHER TYPE OR TRANSACTION DESCRIBED IN THIS
SECTION 2.2.

(M)             “STANDSTILL PERIOD” SHALL MEAN THE PERIOD FROM THE CLOSING DATE
UNTIL THE EARLIEST OF THE FOLLOWING:  (I) THE FOURTH ANNIVERSARY OF THE CLOSING
DATE, (II) THE FIRST DATE ON WHICH THE INVESTORS NO LONGER HAVE THE RIGHT TO
NOMINATE AT LEAST ONE INVESTOR DESIGNEE FOR ELECTION OR APPOINTMENT TO THE BOARD
PURSUANT TO ARTICLE I HEREOF, (III) THE FIRST DATE ON WHICH THE COMPANY OR ANY
OF ITS SUBSIDIARIES COMMENCES OR BECOMES SUBJECT TO ANY PROCEEDING OF
BANKRUPTCY, DISSOLUTION OR LIQUIDATION AND (IV) FIVE (5) BUSINESS DAYS AFTER THE
COMPANY RECEIVES WRITTEN NOTICE FROM INVESTOR OF A MATERIAL BREACH BY THE
COMPANY OF ITS OBLIGATIONS WITH RESPECT TO SECTION 1.1 OR SECTION 1.2 OF THIS
AGREEMENT, WHICH BREACH IS NOT CURED BY THE COMPANY IN SUCH FIVE-DAY PERIOD.

(N)               THE RESTRICTIONS CONTAINED IN THIS SECTION 2.2 SHALL NOT APPLY
TO NONPUBLIC COMMUNICATIONS, INCLUDING ANY NONPUBLIC ACQUISITION OFFER, PROVIDED
THAT SUCH COMMUNICATION IS (I) NOT REASONABLY LIKELY TO REQUIRE THE COMPANY TO
MAKE A PUBLIC ANNOUNCEMENT WITH RESPECT TO THE SUBJECT MATTER OF THE
COMMUNICATIONS OR REGARDING THE POSSIBILITY OF A BUSINESS COMBINATION, MERGER OR
OTHER TYPE OR TRANSACTION DESCRIBED IN THIS SECTION 2.2, AND (II) COMMUNICATED
SOLELY (A) AMONG  ANY OF THE INVESTORS, THE INVESTOR DESIGNEES AND THE INVESTOR
DIRECTORS OR (B) AMONG ANY OF THE INVESTORS, THE INVESTOR DESIGNEES, THE
INVESTOR DIRECTORS AND THE COMPANY (ALL SUCH COMMUNICATION, “NONPUBLIC
COMMUNICATION”); PROVIDED, FURTHER, THAT NOTHING IN THIS SECTION 2.2 SHALL
PROHIBIT THE INVESTORS FROM COMMUNICATING SOLELY IN THE ORDINARY COURSE OF
BUSINESS WITH THEIR DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS,
OWNERS, LIMITED PARTNERS OR OTHER APPLICABLE STAKEHOLDERS WHO HAVE BEEN INFORMED
OF, AND AGREED TO BE BOUND BY, THE TERMS OF SECTION 7.3.

(O)               NOTHING IN THIS SECTION 2.2 SHALL BE INTERPRETED AS PREVENTING
THE INVESTORS FROM MAKING REGULATORY FILINGS REQUIRED BY APPLICABLE LAW,
INCLUDING, FOR THE AVOIDANCE OF DOUBT, FILINGS WITH THE COMMISSION ON SCHEDULE
13D AND AMENDMENTS THERETO, AND ON FORMS 3, 4, AND 5 FOR THE PURPOSES OF
DISCLOSING ACQUISITIONS AND DISPOSITIONS OF SECURITIES OF THE COMPANY
(“MANDATORY PUBLIC FILINGS”); PROVIDED, HOWEVER, THAT NO MANDATORY PUBLIC FILING
MAY DISCLOSE ANY INTENTION TO UNDERTAKE ANY ACTIVITY PROHIBITED BY THIS SECTION
2.2. FURTHER, NOTHING IN THIS SECTION 2.2 SHALL IN ANY WAY LIMIT THE ACTIVITIES
OF ANY INVESTOR DIRECTOR TAKEN IN HIS OR HER CAPACITY AS A DIRECTOR OF THE
COMPANY.

 

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ARTICLE III
REPRESENTATIONS AND WARRANTIES

Section 3.1            Representations and Warranties of the Investors. Each of
First MP and Second MP, solely on behalf of itself and not on behalf of any
other Investor, hereby represents and warrants to the Company as follows:

(A)                IMMEDIATELY FOLLOWING THE CLOSING, SUCH INVESTOR AND ONE OR
MORE OF ITS AFFILIATES WILL BE THE BENEFICIAL OWNER OF THE NUMBER OF COMMON
SHARES LISTED ON ANNEX B OPPOSITE SUCH INVESTOR’S NAME AND AT THAT TIME SUCH
ACQUIRED SHARES WILL CONSTITUTE ALL OF THE COMMON SHARES BENEFICIALLY OWNED BY
SUCH INVESTOR AND SUCH OF ITS AFFILIATES. 

(B)               SUCH INVESTOR HAS BEEN DULY FORMED, IS VALIDLY EXISTING AND IS
IN GOOD STANDING UNDER THE LAWS OF ITS STATE OF ORGANIZATION.  SUCH INVESTOR HAS
ALL REQUISITE LIMITED PARTNERSHIP POWER AND AUTHORITY TO EXECUTE AND DELIVER
THIS AGREEMENT, TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT AND TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.

(C)                THE EXECUTION AND DELIVERY BY SUCH INVESTOR OF THIS
AGREEMENT, THE PERFORMANCE BY SUCH INVESTOR OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE CONSUMMATION BY SUCH INVESTOR OF THE TRANSACTIONS CONTEMPLATED
HEREBY DO NOT AND WILL NOT CONFLICT WITH, VIOLATE ANY PROVISION OF, OR REQUIRE
THE CONSENT OR APPROVAL OF ANY PERSON WHICH HAS NOT BEEN OBTAINED UNDER,
APPLICABLE LAW, THE ORGANIZATIONAL DOCUMENTS OF SUCH INVESTOR OR ANY CONTRACT OR
AGREEMENT TO WHICH SUCH INVESTOR IS A PARTY.

(D)       THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT BY SUCH
INVESTOR HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY LIMITED PARTNERSHIP ACTION
ON THE PART OF SUCH INVESTOR.  THIS AGREEMENT HAS BEEN DULY EXECUTED AND
DELIVERED BY SUCH INVESTOR AND, ASSUMING THE DUE AUTHORIZATION, EXECUTION AND
DELIVERY BY EACH OF THE OTHER PARTIES HERETO, CONSTITUTES A LEGAL, VALID AND
BINDING OBLIGATION OF SUCH INVESTOR, ENFORCEABLE AGAINST SUCH INVESTOR IN
ACCORDANCE WITH ITS TERMS, SUBJECT TO BANKRUPTCY, INSOLVENCY AND OTHER LAWS OF
GENERAL APPLICABILITY RELATING TO OR AFFECTING CREDITORS’ RIGHTS AND SUBJECT TO
GENERAL PRINCIPLES OF EQUITY.

(E)                SUCH INVESTOR:  (I) IS ACQUIRING THE ACQUIRED SHARES FOR ITS
OWN ACCOUNT, SOLELY FOR INVESTMENT AND NOT WITH A VIEW TOWARD, OR FOR SALE IN
CONNECTION WITH, ANY DISTRIBUTION THEREOF IN VIOLATION OF ANY FEDERAL OR STATE
SECURITIES OR “BLUE SKY” LAWS, OR WITH ANY PRESENT INTENTION OF DISTRIBUTING OR
SELLING SUCH ACQUIRED SHARES IN VIOLATION OF ANY SUCH LAWS, (II) HAS SUCH
KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS AND IN INVESTMENTS OF
THIS TYPE THAT IT IS CAPABLE OF EVALUATING THE MERITS AND RISKS OF ITS
INVESTMENT IN THE ACQUIRED SHARES AND OF MAKING AN INFORMED INVESTMENT DECISION
AND (III) IS AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501 OF
REGULATION D UNDER THE SECURITIES ACT.  SUCH INVESTOR HAS REQUESTED, RECEIVED,
REVIEWED AND CONSIDERED ALL INFORMATION THAT SUCH INVESTOR DEEMS RELEVANT IN
MAKING AN INFORMED DECISION TO INVEST IN THE SHARES AND HAS HAD AN OPPORTUNITY
TO DISCUSS THE COMPANY’S BUSINESS, MANAGEMENT AND FINANCIAL AFFAIRS WITH ITS
MANAGEMENT AND ALSO HAD AN OPPORTUNITY TO ASK QUESTIONS OF OFFICERS OF THE
COMPANY THAT WERE ANSWERED TO SUCH INVESTOR’S SATISFACTION.  SUCH INVESTOR
UNDERSTANDS THAT THE COMPANY IS RELYING ON THE STATEMENTS CONTAINED HEREIN TO
ESTABLISH AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND UNDER
STATE SECURITIES LAWS AND ACKNOWLEDGES THAT THE ACQUIRED SHARES ARE NOT
REGISTERED UNDER THE SECURITIES ACT OR ANY

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other Applicable Law and that such shares may not be Transferred except pursuant
to the registration provisions of the Securities Act or pursuant to an
applicable exemption therefrom.

Section 3.2            Representations and Warranties of EBF. EBF hereby
represents and warrants to the Company as follows:

(A)                AS OF THE DATE HEREOF, EBF DOES NOT BENEFICIALLY OWN,
DIRECTLY OR INDIRECTLY, ANY COMMON SHARES OR OTHER SECURITIES OF THE COMPANY.

(B)               EBF HAS BEEN DULY FORMED, IS VALIDLY EXISTING AND IS IN GOOD
STANDING UNDER THE LAWS OF ITS STATE OF ORGANIZATION.  EBF HAS ALL REQUISITE
LIMITED PARTNERSHIP POWER AND AUTHORITY TO EXECUTE AND DELIVER THIS AGREEMENT,
TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT AND TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED HEREBY.

(C)                THE EXECUTION AND DELIVERY BY EBF OF THIS AGREEMENT, THE
PERFORMANCE BY EBF OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE CONSUMMATION
BY EBF OF THE TRANSACTIONS CONTEMPLATED HEREBY DO NOT AND WILL NOT CONFLICT
WITH, VIOLATE ANY PROVISION OF, OR REQUIRE ANY CONSENT OR APPROVAL OF ANY PERSON
WHICH HAS NOT BEEN OBTAINED UNDER, APPLICABLE LAW, THE ORGANIZATIONAL DOCUMENTS
OF EBF OR ANY CONTRACT OR AGREEMENT TO WHICH EBF IS A PARTY.

(D)               THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT BY
EBF HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY LIMITED PARTNERSHIP  ACTION ON
THE PART OF EBF.  THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY EBF
AND, ASSUMING THE DUE AUTHORIZATION, EXECUTION AND DELIVERY BY EACH OF THE OTHER
PARTIES HERETO, CONSTITUTES A LEGAL, VALID AND BINDING OBLIGATION OF EBF,
ENFORCEABLE AGAINST EBF IN ACCORDANCE WITH ITS TERMS, SUBJECT TO BANKRUPTCY,
INSOLVENCY AND OTHER LAWS OF GENERAL APPLICABILITY RELATING TO OR AFFECTING
CREDITORS’ RIGHTS AND SUBJECT TO GENERAL PRINCIPLES OF EQUITY.

Section 3.3            Representations and Warranties of the Company. The
Company hereby represents and warrants to the Investors and EBF as follows:

(A)                THE COMPANY IS A COMPANY DULY INCORPORATED, VALIDLY EXISTING
AND IN GOOD STANDING UNDER THE LAWS OF BERMUDA.  THE COMPANY HAS ALL REQUISITE
POWER AND AUTHORITY TO EXECUTE AND DELIVER THIS AGREEMENT, TO PERFORM ITS
OBLIGATIONS UNDER THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED
HEREBY.

(B)               THE EXECUTION AND DELIVERY BY THE COMPANY OF THIS AGREEMENT,
THE PERFORMANCE OF THE OBLIGATIONS OF THE COMPANY UNDER THIS AGREEMENT AND THE
CONSUMMATION BY THE COMPANY OF THE TRANSACTIONS CONTEMPLATED HEREBY DO NOT AND
WILL NOT CONFLICT WITH, VIOLATE ANY PROVISION OF, OR REQUIRE ANY CONSENT OR
APPROVAL OF ANY PERSON UNDER, APPLICABLE LAW, THE ORGANIZATIONAL DOCUMENTS OF
THE COMPANY OR ANY CONTRACT OR AGREEMENT TO WHICH THE COMPANY IS A PARTY.

(C)                THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT BY
THE COMPANY HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON THE
PART OF THE COMPANY. THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY THE
COMPANY AND, ASSUMING THE DUE AUTHORIZATION, EXECUTION AND DELIVERY BY EACH OF
THE OTHER PARTIES HERETO, CONSTITUTES A LEGAL, VALID AND BINDING OBLIGATION OF
THE COMPANY, ENFORCEABLE AGAINST THE COMPANY IN ACCORDANCE WITH ITS

8

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terms, subject to bankruptcy, insolvency and other laws of general applicability
relating to or affecting creditors’ rights and subject to general principles of
equity. 

(D)               THE BOARD HAS APPROVED THE PURCHASE AGREEMENT AND THE
ACQUISITION OF THE ACQUIRED SHARES BY THE INVESTORS AND NONE OF THE INVESTORS
WILL BE DEEMED AN INTERESTED PERSON UNDER THE BYE-LAWS.  SUCH APPROVAL WILL
REMAIN IN EFFECT AND WILL NOT BE AMENDED, QUALIFIED OR RESCINDED IN ANY RESPECT.

(E)                THE COMPANY HAS TAKEN ALL NECESSARY ACTION TO EXEMPT THE
ACQUISITION OF THE ACQUIRED SHARES BY THE INVESTORS AND THEIR AFFILIATES AND
ASSOCIATES (AS DEFINED IN THE RIGHTS AGREEMENT) FROM THE PROVISIONS OF THE
RIGHTS AGREEMENT AND HAS DELIVERED TO FIRST MP AND SECOND MP A TRUE AND COMPLETE
COPY OF THE AMENDMENT TO THE RIGHTS AGREEMENT GIVING EFFECT TO SUCH EXEMPTION. 
SUCH EXEMPTION WILL REMAIN IN EFFECT AND WILL NOT BE AMENDED, QUALIFIED OR
RESCINDED IN ANY RESPECT. 

(F)                THE AUTHORIZED CAPITAL STOCK OF THE COMPANY CONSISTS OF
62,500,000 COMMON SHARES AND, AS OF DECEMBER 20, 2010:  (I) 37,958,622 COMMON
SHARES WERE ISSUED AND OUTSTANDING, (II) 877,689 COMMON SHARES WERE UNISSUED AND
RESERVED FOR ISSUANCE PURSUANT TO OPTIONS ISSUED TO EMPLOYEES OF THE COMPANY AND
ITS SUBSIDIARIES, (III) 990,674 COMMON SHARES WERE UNISSUED AND RESERVED FOR
ISSUANCE PURSUANT TO RESTRICTED SHARE UNITS AND (IV) 267,850 COMMON SHARES WERE
UNISSUED AND RESERVED FOR ISSUANCE PURSUANT TO PERFORMANCE SHARE UNITS ISSUED TO
EMPLOYEES OF THE COMPANY AND ITS SUBSIDIARIES. 

(G)               TRUE AND COMPLETE COPIES OF THE (I) COMPANY’S MEMORANDUM OF
ASSOCIATION AND ALL AMENDMENTS THERETO, (II) BYE-LAWS, AS AMENDED TO DATE, AND
(III) THE RIGHTS AGREEMENT AND THE AMENDMENT THERETO HAVE BEEN DELIVERED TO
FIRST MP AND SECOND MP.  NONE OF SUCH INSTRUMENTS SHALL BE AMENDED PRIOR TO THE
CLOSING DATE.

(H)               EXCEPT AS LISTED ON SCHEDULE 3.3(H), THE COMPANY IS NOT A
PARTY TO ANY AGREEMENT GRANTING ANY OTHER PERSON REGISTRATION RIGHTS.

ARTICLE IV
REGISTRATION

Section 4.1            Piggyback Registrations.

(A)                RIGHT TO PIGGYBACK.  WHENEVER THE COMPANY PROPOSES TO
REGISTER ANY COMMON SHARES IN CONNECTION WITH A PUBLIC OFFERING SOLELY FOR CASH,
OTHER THAN PURSUANT TO A SPECIAL REGISTRATION, AND THE REGISTRATION FORM TO BE
FILED MAY BE USED FOR THE REGISTRATION OR QUALIFICATION FOR DISTRIBUTION OF
REGISTRABLE SECURITIES, THE COMPANY WILL GIVE PROMPT WRITTEN NOTICE TO ALL
HOLDERS OF REGISTRABLE SECURITIES OF ITS INTENTION TO EFFECT SUCH A REGISTRATION
AND, SUBJECT TO SECTION 4.1(C), WILL INCLUDE IN SUCH REGISTRATION ALL
REGISTRABLE SECURITIES THAT ARE PERMITTED TO BE TRANSFERRED PURSUANT TO SECTION
2.1 WITH RESPECT TO WHICH THE COMPANY HAS RECEIVED WRITTEN REQUESTS FOR
INCLUSION THEREIN WITHIN FIVE (5) BUSINESS DAYS AFTER THE DATE OF THE COMPANY’S
NOTICE (A “PIGGYBACK REGISTRATION”).  ANY HOLDER OF REGISTRABLE SECURITIES THAT
HAS MADE SUCH A WRITTEN REQUEST MAY WITHDRAW ITS REGISTRABLE SECURITIES FROM
SUCH PIGGYBACK REGISTRATION BY GIVING WRITTEN NOTICE TO THE COMPANY AND THE
MANAGING UNDERWRITER(S), IF ANY, ON OR BEFORE THE FIFTH BUSINESS DAY PRIOR TO
THE PLANNED EFFECTIVE DATE OF SUCH PIGGYBACK REGISTRATION.  THE

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Company may, in its sole discretion, terminate or withdraw any registration
under this Section 4.1 prior to the effectiveness of such registration, whether
or not any holder of Registrable Securities has elected to include Registrable
Securities in such registration and the Company will have no liability to any
holder of Registrable Securities in connection with such termination or
withdrawal.

(B)               UNDERWRITTEN REGISTRATION.  IF THE REGISTRATION REFERRED TO IN
SECTION 4.1(A) IS PROPOSED TO BE UNDERWRITTEN, THE COMPANY WILL SO ADVISE THE
HOLDERS OF REGISTRABLE SECURITIES.  IN SUCH EVENT, THE RIGHT OF ANY HOLDER OF
REGISTRABLE SECURITIES TO REGISTRATION PURSUANT TO THIS SECTION 4.1 WILL BE
CONDITIONED UPON SUCH HOLDER’S PARTICIPATION IN SUCH UNDERWRITING AND THE
INCLUSION OF SUCH HOLDER’S REGISTRABLE SECURITIES IN THE UNDERWRITING, AND UPON
EACH SUCH HOLDER OF REGISTRABLE SECURITIES’ COMPLIANCE WITH SECTION 4.7 OF THIS
AGREEMENT.  

(C)                PRIORITY ON PRIMARY REGISTRATIONS.  IF A PIGGYBACK
REGISTRATION RELATES TO AN UNDERWRITTEN PRIMARY OFFERING ON BEHALF OF THE
COMPANY, AND THE MANAGING UNDERWRITER(S) ADVISE THE COMPANY THAT, IN THEIR
OPINION, THE NUMBER OF SECURITIES REQUESTED TO BE INCLUDED IN SUCH REGISTRATION
EXCEEDS THE NUMBER THAT CAN BE SOLD WITHOUT ADVERSELY AFFECTING THE
MARKETABILITY OF SUCH OFFERING WITHIN A PER SHARE PRICE RANGE ACCEPTABLE TO THE
COMPANY, THE COMPANY WILL INCLUDE IN SUCH REGISTRATION OR PROSPECTUS ONLY SUCH
NUMBER OF SECURITIES THAT IN, THE OPINION OF SUCH UNDERWRITERS, CAN BE SOLD
WITHOUT ADVERSELY AFFECTING THE MARKETABILITY OF THE OFFERING WITHIN THE PER
SHARE PRICE RANGE ACCEPTABLE TO THE COMPANY, WHICH SECURITIES WILL BE SO
INCLUDED IN THE FOLLOWING ORDER OF PRIORITY:  (I) FIRST, THE NUMBER OF
SECURITIES THE COMPANY PROPOSES TO SELL, (II) SECOND, THE NUMBER OF REGISTRABLE
SECURITIES OF ANY HOLDERS OF REGISTRABLE SECURITIES WHO HAVE REQUESTED
REGISTRATION OF REGISTRABLE SECURITIES PURSUANT TO SECTION 4.1(A), PRO RATA ON
THE BASIS OF THE AGGREGATE NUMBER OF SUCH SECURITIES OWNED BY EACH SUCH HOLDER
OF REGISTRABLE SECURITIES AND (III) THIRD, ANY SECURITIES REQUESTED TO BE
INCLUDED PURSUANT TO THE EXERCISE OF OTHER CONTRACTUAL REGISTRATION RIGHTS
GRANTED BY THE COMPANY, PRO RATA AMONG SUCH HOLDERS (IF APPLICABLE) ON THE BASIS
OF THE AGGREGATE NUMBER OF SECURITIES REQUESTED TO BE INCLUDED BY SUCH HOLDERS.

SECTION 4.2            SHELF REGISTRATION.

(A)                SUBJECT TO SECTIONS 4.2(B) AND 4.4, FROM AND AFTER THE
SIX-MONTH ANNIVERSARY OF THE CLOSING DATE, INVESTOR SHALL BE ENTITLED TO REQUEST
IN WRITING THAT THE COMPANY FILE WITH THE COMMISSION A SHELF REGISTRATION
STATEMENT RELATING TO THE OFFER AND SALE OF ALL OF THE REGISTRABLE SECURITIES
(THE “SHELF REGISTRATION”) AND, UPON THE RECEIPT OF SUCH A WRITTEN REQUEST, THE
COMPANY WILL USE ITS REASONABLE BEST EFFORTS TO CAUSE SUCH A SHELF REGISTRATION
TO BE FILED AND TO BE DECLARED EFFECTIVE UNDER THE SECURITIES ACT AS SOON AS
POSSIBLE AFTER FILING.  THE COMPANY SHALL AMEND OR SUPPLEMENT SUCH SHELF
REGISTRATION STATEMENT TO INCLUDE ADDITIONAL REGISTRABLE SECURITIES AT SUCH TIME
AS THE TRANSFER OF SUCH REGISTRABLE SECURITIES IS PERMITTED PURSUANT TO SECTION
2.1(A).  THE COMPANY SHALL USE ITS REASONABLE BEST EFFORTS TO CAUSE THE SHELF
REGISTRATION STATEMENT TO REMAIN EFFECTIVE, INCLUDING BY FILING A REPLACEMENT
SHELF REGISTRATION STATEMENT UPON THE EXPIRATION OF THE ORIGINAL SHELF
REGISTRATION STATEMENT, UNTIL SUCH TIME AS THERE ARE NO REMAINING REGISTRABLE
SECURITIES.  DURING SUCH TIME, THE COMPANY SHALL USE ITS REASONABLE BEST EFFORTS
TO AMEND THE SHELF REGISTRATION STATEMENT FROM TIME TO TIME AS REQUESTED BY THE
HOLDERS OF REGISTRABLE SECURITIES, IN THEIR REASONABLE DISCRETION, TO PERMIT
DISPOSITION OF REGISTRABLE

10

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Securities pursuant thereto in accordance with the preferred method of
distribution of Common Shares under the Shelf Registration Statement of such
holders.

(B)               THE COMPANY MAY SUSPEND THE EFFECTIVENESS OF ANY SHELF
REGISTRATION (OR DECLINE TO FILE OR REQUEST EFFECTIVENESS OF A SHELF
REGISTRATION) FOR A PERIOD NOT TO EXCEED THIRTY (30) DAYS IN ANY NINETY (90) DAY
PERIOD OR AN AGGREGATE OF NINETY (90) DAYS IN ANY TWELVE (12) MONTH PERIOD IF
THE BOARD OF THE COMPANY SHALL HAVE DETERMINED IN GOOD FAITH THAT BECAUSE OF
VALID BUSINESS REASONS (NOT INCLUDING AVOIDANCE OF THE COMPANY’S OBLIGATIONS
HEREUNDER), INCLUDING WITHOUT LIMITATION THE ACQUISITION OR DIVESTITURE OF
ASSETS, PENDING CORPORATE DEVELOPMENTS AND SIMILAR EVENTS, IT IS IN THE BEST
INTERESTS OF THE COMPANY TO SUSPEND SUCH EFFECTIVENESS, AND PRIOR TO SUCH
SUSPENSION, THE COMPANY PROVIDES THE INVESTORS WITH WRITTEN NOTICE OF SUCH
SUSPENSION, WHICH NOTICE NEED NOT SPECIFY THE NATURE OF THE EVENT GIVING RISE TO
SUCH SUSPENSION.

Section 4.3            Demand Registration.

(A)                REQUESTS FOR REGISTRATION. SUBJECT TO SECTION 4.3(B), AT ANY
TIME FOLLOWING THE SIX-MONTH ANNIVERSARY OF THE CLOSING DATE IF A SHELF
REGISTRATION STATEMENT IS NOT EFFECTIVE, INVESTOR MAY REQUEST IN WRITING THAT
THE COMPANY EFFECT THE UNDERWRITTEN REGISTRATION OF ALL OR ANY PART OF THE
REGISTRABLE SECURITIES HELD BY SUCH INVESTOR OR INVESTORS (A “REGISTRATION
REQUEST”) (WHICH REGISTRATION REQUEST SHALL SPECIFY THE NUMBER OF REGISTRABLE
SECURITIES INTENDED TO BE REGISTERED).  PROMPTLY AFTER ITS RECEIPT OF ANY
REGISTRATION REQUEST, THE COMPANY WILL GIVE WRITTEN NOTICE OF SUCH REQUEST TO
ALL OTHER HOLDERS OF REGISTRABLE SECURITIES (WHICH NOTICE SHALL BE GIVEN IN ANY
EVENT WITHIN FIVE (5) BUSINESS DAYS OF THE DATE ON WHICH THE COMPANY RECEIVED
THE APPLICABLE REGISTRATION REQUEST) AND WILL USE ITS REASONABLE BEST EFFORTS TO
REGISTER, AS SOON AS PRACTICABLE (AND IN ANY EVENT WITHIN NINETY (90) DAYS OF
THE DATE OF SUCH REGISTRATION REQUEST) IN ACCORDANCE WITH THE PROVISIONS OF THIS
AGREEMENT, ALL REGISTRABLE SECURITIES THAT HAVE BEEN REQUESTED TO BE REGISTERED
IN THE REGISTRATION REQUEST OR BY ANY OTHER HOLDERS OF REGISTRABLE SECURITIES BY
WRITTEN NOTICE TO THE COMPANY GIVEN WITHIN TEN (10) BUSINESS DAYS AFTER THE DATE
THE COMPANY HAS GIVEN SUCH HOLDERS OF REGISTRABLE SECURITIES NOTICE OF THE
REGISTRATION REQUEST. ANY REGISTRATION REQUESTED BY AN INVESTOR OR INVESTORS
PURSUANT TO THIS SECTION 4.3(A) IS REFERRED TO IN THIS AGREEMENT AS A “DEMAND
REGISTRATION.”

(B)               LIMITATION ON DEMAND REGISTRATIONS.

(I)                 THE COMPANY SHALL NOT BE REQUIRED TO (A) EFFECT MORE THAN
THREE (3) DEMAND REGISTRATIONS, OR (B) EFFECT MORE THAN ONE (1) DEMAND
REGISTRATION WITHIN ANY TWELVE (12) MONTH PERIOD. NO DEMAND REGISTRATION WILL
COUNT FOR THE PURPOSES OF THE LIMITATIONS IN THIS SECTION 4.3(B) UNLESS THE
REGISTRATION HAS BEEN DECLARED OR ORDERED EFFECTIVE BY THE COMMISSION AND
REMAINS CONTINUOUSLY EFFECTIVE UNTIL THE EARLIER OF (X) THE DATE ON WHICH ALL
REGISTRABLE SECURITIES COVERED THEREBY HAVE BEEN SOLD PURSUANT TO SUCH
REGISTRATION (OR IF EARLIER, THE FIRST DATE ON WHICH NO REGISTRABLE SECURITIES
REMAIN OUTSTANDING) AND (Y) THE CLOSE OF BUSINESS ON THE 180TH DAY AFTER SUCH
REGISTRATION HAS BEEN DECLARED OR ORDERED EFFECTIVE BY THE COMMISSION.

(II)               THE COMPANY ALSO SHALL NOT BE REQUIRED TO EFFECT ANY DEMAND
REGISTRATION IF THE COMPANY HAS NOTIFIED THE INVESTOR OR INVESTORS MAKING THE
REGISTRATION REQUEST THAT, IN THE GOOD FAITH JUDGMENT OF THE COMPANY, IT WOULD
BE

11

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MATERIALLY DETRIMENTAL TO THE COMPANY FOR SUCH REGISTRATION TO BE EFFECTED AT
SUCH TIME, IN WHICH EVENT THE COMPANY SHALL HAVE THE RIGHT TO DEFER SUCH FILING
FOR A PERIOD OF NOT MORE THAN FORTY-FIVE (45) DAYS AFTER RECEIPT OF THE REQUEST
OF THE INVESTOR OR INVESTORS; PROVIDED THAT SUCH RIGHT TO DELAY A REQUEST
PURSUANT TO THIS SECTION 4.3(B)(II) SHALL BE EXERCISED BY THE COMPANY NOT MORE
THAN THREE TIMES IN ANY TWELVE (12) MONTH PERIOD AND NOT MORE THAN NINETY (90)
DAYS IN THE AGGREGATE IN SUCH TWELVE (12) MONTH PERIOD. IF THE COMPANY POSTPONES
THE FILING OF A PROSPECTUS OR THE EFFECTIVENESS OF A REGISTRATION STATEMENT
PURSUANT TO THIS SECTION 4.3(B)(II), AN INVESTOR OR INVESTORS WILL BE ENTITLED
TO WITHDRAW ITS OR THEIR REGISTRATION REQUEST AND, IF SUCH REQUEST IS WITHDRAWN,
SUCH REGISTRATION REQUEST WILL NOT COUNT FOR THE PURPOSES OF THE LIMITATION SET
FORTH IN THIS SECTION 4.3(B).

(C)                SELECTION OF UNDERWRITERS.

(I)                 THE LEAD UNDERWRITER TO ADMINISTER THE OFFERING IN
CONNECTION WITH ANY DEMAND REGISTRATION WILL BE CHOSEN BY THE INVESTORS SUBJECT
TO THE PRIOR WRITTEN CONSENT, NOT TO BE UNREASONABLY DENIED, WITHHELD,
CONDITIONED OR DELAYED, OF THE COMPANY.

(II)               THE RIGHT OF ANY HOLDERS OF REGISTRABLE SECURITIES TO
REGISTRATION PURSUANT TO THIS SECTION 4.3 WILL BE CONDITIONED UPON SUCH HOLDERS
OF REGISTRABLE SECURITIES COMPLYING WITH SECTION 4.7 OF THIS AGREEMENT.

(D)               PRIORITY ON DEMAND REGISTRATIONS. THE COMPANY WILL NOT INCLUDE
IN ANY DEMAND REGISTRATION PURSUANT TO THIS SECTION 4.3 ANY SHARES OF COMMON
SHARES THAT ARE NOT REGISTRABLE SECURITIES, WITHOUT THE PRIOR WRITTEN CONSENT OF
THE INVESTOR WHO DELIVERED THE REGISTRATION REQUEST. IF THE MANAGING UNDERWRITER
ADVISES THE COMPANY THAT IN ITS REASONABLE OPINION THE NUMBER OF REGISTRABLE
SECURITIES (AND, IF PERMITTED HEREUNDER, OTHER SHARES OF COMMON SHARES REQUESTED
TO BE INCLUDED IN SUCH OFFERING) EXCEEDS THE NUMBER OF SECURITIES THAT CAN BE
SOLD IN SUCH OFFERING WITHOUT ADVERSELY AFFECTING THE MARKETABILITY OF THE
OFFERING (INCLUDING AN ADVERSE EFFECT ON THE PER SHARE OFFERING PRICE), THE
COMPANY WILL INCLUDE IN SUCH OFFERING ONLY SUCH NUMBER OF SECURITIES THAT IN THE
REASONABLE OPINION OF SUCH UNDERWRITERS CAN BE SOLD WITHOUT ADVERSELY AFFECTING
THE MARKETABILITY OF THE OFFERING (INCLUDING AN ADVERSE EFFECT ON THE PER SHARE
OFFERING PRICE), WHICH SECURITIES WILL BE SO INCLUDED IN THE FOLLOWING ORDER OF
PRIORITY: (I) FIRST, REGISTRABLE SECURITIES OF THE INVESTORS, (II) SECOND, ANY
SHARES OF COMMON SHARES TO BE SOLD BY THE COMPANY AND (III) THIRD, ANY SHARES OF
COMMON SHARES REQUESTED TO BE INCLUDED PURSUANT TO THE EXERCISE OF OTHER
CONTRACTUAL REGISTRATION RIGHTS GRANTED BY THE COMPANY PRO RATA AMONG SUCH
HOLDERS (IF APPLICABLE) ON THE BASIS OF THE AGGREGATE NUMBER OF SECURITIES
REQUESTED TO BE INCLUDED BY SUCH HOLDERS.

Section 4.4            NYSE Listing and Registration with the Commission.
Nothing in this Article IV shall require the Company to (i) maintain the listing
of its Common Shares on the NYSE or (ii) maintain the registration of its Common
Shares with the Commission, and the Company’s obligations under this Article IV
shall be limited to the extent that the Company’s Common Shares are not listed
on the NYSE or registered with the Commission.

Section 4.5            Registration Procedures. Subject to Section 4.3(b),
whenever the holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to

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Sections 4.1, 4.2 or 4.3 of this Agreement, the Company will use its reasonable
best efforts to effect the registration and sale of such Registrable Securities
as soon as reasonably practicable in accordance with the intended method of
disposition thereof, and pursuant thereto the Company shall use its reasonable
best efforts to as expeditiously as reasonably practicable:

(A)                WITH RESPECT TO A DEMAND REGISTRATION OR A PIGGYBACK
REGISTRATION, PREPARE AND FILE WITH THE COMMISSION A REGISTRATION STATEMENT WITH
RESPECT TO SUCH REGISTRABLE SECURITIES (WHICH, FOR THE AVOIDANCE OF DOUBT, MAY
BE A SHELF REGISTRATION) AND USE ITS REASONABLE BEST EFFORTS TO CAUSE SUCH
REGISTRATION STATEMENT TO BECOME EFFECTIVE, OR PREPARE AND FILE WITH THE
COMMISSION A PROSPECTUS SUPPLEMENT WITH RESPECT TO SUCH REGISTRABLE SECURITIES
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT;

(B)               PREPARE AND FILE WITH THE COMMISSION SUCH AMENDMENTS AND
SUPPLEMENTS TO THE APPLICABLE REGISTRATION STATEMENT AND THE PROSPECTUS OR
PROSPECTUS SUPPLEMENT USED IN CONNECTION WITH SUCH REGISTRATION STATEMENT AS MAY
BE NECESSARY TO COMPLY WITH THE PROVISIONS OF THE SECURITIES ACT WITH RESPECT TO
THE DISPOSITION OF ALL SECURITIES COVERED BY SUCH REGISTRATION STATEMENT;

(C)                FURNISH TO THE HOLDERS OF REGISTRABLE SECURITIES SUCH NUMBER
OF COPIES OF THE APPLICABLE REGISTRATION STATEMENT AND EACH SUCH AMENDMENT AND
SUPPLEMENT THERETO (INCLUDING IN EACH CASE ALL EXHIBITS) AND OF A PROSPECTUS,
INCLUDING A PRELIMINARY PROSPECTUS, IN CONFORMITY WITH THE REQUIREMENTS OF THE
SECURITIES ACT, AND SUCH OTHER DOCUMENTS AS THEY MAY REASONABLY REQUEST IN ORDER
TO FACILITATE THE DISPOSITION OF REGISTRABLE SECURITIES OWNED BY THEM;

(D)               USE ITS REASONABLE BEST EFFORTS TO REGISTER AND QUALIFY THE
SECURITIES COVERED BY SUCH REGISTRATION STATEMENT UNDER SUCH OTHER SECURITIES,
“BLUE SKY” OR OTHER LAWS OF SUCH JURISDICTIONS AS SHALL BE REASONABLY REQUESTED
BY THE HOLDERS OF REGISTRABLE SECURITIES, TO KEEP SUCH REGISTRATION OR
QUALIFICATION IN EFFECT FOR SO LONG AS SUCH REGISTRATION STATEMENT REMAINS IN
EFFECT, AND TO TAKE ANY OTHER ACTION THAT MAY BE REASONABLY NECESSARY TO ENABLE
SUCH SELLER TO CONSUMMATE THE DISPOSITION IN SUCH JURISDICTIONS OF THE
SECURITIES OWNED BY SUCH HOLDER OF REGISTRABLE SECURITIES; PROVIDED THAT THE
COMPANY SHALL NOT BE REQUIRED IN CONNECTION THEREWITH OR AS A CONDITION THERETO
TO QUALIFY TO DO BUSINESS OR TO FILE A GENERAL CONSENT TO SERVICE OF PROCESS IN
ANY SUCH STATES OR JURISDICTIONS; 

(E)                ENTER INTO CUSTOMARY AGREEMENTS (INCLUDING, IF PERMITTED
HEREUNDER, IF THE METHOD OF DISTRIBUTION IS BY MEANS OF AN UNDERWRITING, AN
UNDERWRITING AGREEMENT IN CUSTOMARY FORM WITH THE MANAGING UNDERWRITER(S) OF
SUCH OFFERING) AND TAKE SUCH OTHER ACTIONS (INCLUDING PARTICIPATING IN AND
MAKING DOCUMENTS AVAILABLE FOR THE DUE DILIGENCE REVIEW OF UNDERWRITERS IF THE
METHOD OF DISTRIBUTION IS BY MEANS OF AN UNDERWRITING) AS ARE REASONABLY
REQUIRED IN ORDER TO FACILITATE THE DISPOSITION OF SUCH REGISTRABLE SECURITIES. 
EACH HOLDER OF REGISTRABLE SECURITIES PARTICIPATING IN SUCH UNDERWRITING SHALL
ALSO ENTER INTO AND PERFORM ITS OBLIGATIONS UNDER SUCH UNDERWRITING AGREEMENT;

(F)                WITH RESPECT TO A DEMAND REGISTRATION, AT THE REASONABLE
REQUEST OF THE INVESTOR WHO DELIVERED THE REGISTRATION REQUEST, CAUSE ITS SENIOR
EXECUTIVES TO PARTICIPATE, AT THE COMPANY’S EXPENSE, IN CUSTOMARY INVESTOR
PRESENTATIONS AND “ROAD SHOWS” (TO BE SCHEDULED IN A

13

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collaborative manner so as not to unreasonably interfere with the conduct of the
business of the Company);

(G)               NOTIFY EACH HOLDER OF REGISTRABLE SECURITIES AT ANY TIME WHEN
A PROSPECTUS RELATING THERETO IS REQUIRED TO BE DELIVERED UNDER THE SECURITIES
ACT OF THE HAPPENING OF ANY EVENT AS A RESULT OF WHICH THE APPLICABLE
PROSPECTUS, AS THEN IN EFFECT, INCLUDES AN UNTRUE STATEMENT OF A MATERIAL FACT
OR OMITS TO STATE A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO
MAKE THE STATEMENTS THEREIN NOT MISLEADING IN LIGHT OF THE CIRCUMSTANCES THEN
EXISTING (ANY SUCH DEFECT, A “MATERIAL DEFECT”), PROMPTLY UPON THE EXECUTIVE
OFFICERS OF THE COMPANY OBTAINING ACTUAL KNOWLEDGE OF SUCH MATERIAL DEFECT; 

(H)               USE ITS COMMERCIALLY REASONABLE EFFORTS TO FURNISH TO THE
MANAGING UNDERWRITER, IF ANY, (I) AN OPINION OF OUTSIDE LEGAL COUNSEL
REPRESENTING THE COMPANY FOR THE PURPOSES OF SUCH REGISTRATION, IN FORM AND
SUBSTANCE AS IS CUSTOMARILY GIVEN TO UNDERWRITERS IN AN UNDERWRITTEN PUBLIC
OFFERING, ADDRESSED TO THE UNDERWRITERS, AND (II) A “COMFORT LETTER” FROM THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS OF THE COMPANY ADDRESSED TO
UNDERWRITERS, IF ANY, IN FORM AND SUBSTANCE AS IS CUSTOMARILY GIVEN BY
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS TO UNDERWRITERS IN AN UNDERWRITTEN
PUBLIC OFFERING;

(I)                 GIVE WRITTEN NOTICE TO THE HOLDERS OF REGISTRABLE
SECURITIES, PROMPTLY UPON THE EXECUTIVE OFFICERS OF THE COMPANY OBTAINING ACTUAL
KNOWLEDGE:

(I)                 THAT ANY REGISTRATION STATEMENT RELATING TO SUCH
REGISTRATIONS OR ANY AMENDMENT THERETO HAS BEEN FILED WITH THE COMMISSION AND
THAT SUCH REGISTRATION STATEMENT OR ANY POST-EFFECTIVE AMENDMENT THERETO HAS
BECOME EFFECTIVE;

(II)       OF ANY REQUEST BY THE COMMISSION FOR AMENDMENTS OR SUPPLEMENTS TO ANY
REGISTRATION STATEMENT FILED IN CONNECTION THEREWITH OR THE PROSPECTUS INCLUDED
THEREIN OR FOR ADDITIONAL INFORMATION;

(iii)      of the issuance by the Commission of any stop order suspending the
effectiveness of any Registration Statement filed in connection therewith or the
initiation of any proceedings for that purpose;

 

(IV)             OF THE RECEIPT BY THE COMPANY OR ITS LEGAL COUNSEL OF ANY
NOTIFICATION WITH RESPECT TO THE SUSPENSION OF THE QUALIFICATION OF THE COMMON
SHARES FOR SALE IN ANY JURISDICTION OR THE INITIATION OR THREATENING OF ANY
PROCEEDING FOR SUCH PURPOSE; AND

(V)               OF THE HAPPENING OF ANY EVENT THAT REQUIRES THE COMPANY TO
MAKE CHANGES IN ANY EFFECTIVE REGISTRATION STATEMENT FILED IN CONNECTION
THEREWITH OR THE PROSPECTUS RELATED TO THE REGISTRATION STATEMENT IN ORDER TO
MAKE THE STATEMENTS THEREIN NOT MISLEADING (WHICH NOTICE SHALL BE ACCOMPANIED BY
AN INSTRUCTION TO SUSPEND THE USE OF THE PROSPECTUS UNTIL THE REQUISITE CHANGES
HAVE BEEN MADE.)

(J)                 USE COMMERCIALLY REASONABLE EFFORTS TO PREVENT THE ISSUANCE
OR OBTAIN THE WITHDRAWAL OF ANY ORDER SUSPENDING THE EFFECTIVENESS OF ANY
REGISTRATION STATEMENT REFERRED TO IN SECTION 4.5(I)(III) AT THE EARLIEST
PRACTICABLE TIME;

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(K)               UPON THE EXECUTIVE OFFICERS OF THE COMPANY OBTAINING ACTUAL
KNOWLEDGE OF THE OCCURRENCE OF ANY EVENT CONTEMPLATED BY SECTION 4.5(I)(V),
PROMPTLY PREPARE A POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION STATEMENT OR A
SUPPLEMENT TO THE RELATED PROSPECTUS OR FILE ANY OTHER REQUIRED DOCUMENT SO
THAT, AS THEREAFTER DELIVERED TO THE HOLDERS OF REGISTRABLE SECURITIES, THE
PROSPECTUS WILL NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO
STATE ANY MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS THEREIN, IN LIGHT OF
THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING.  IF THE COMPANY
NOTIFIES THE HOLDERS OF REGISTRABLE SECURITIES IN ACCORDANCE WITH SECTION
4.5(I)(V) TO SUSPEND THE USE OF THE PROSPECTUS UNTIL THE REQUISITE CHANGES TO
THE PROSPECTUS HAVE BEEN MADE, THEN THE HOLDERS OF REGISTRABLE SECURITIES SHALL
SUSPEND THE USE OF SUCH PROSPECTUS AND USE THEIR COMMERCIALLY REASONABLE EFFORTS
TO RETURN TO THE COMPANY ALL HARD COPIES OF SUCH PROSPECTUS (AT THE COMPANY’S
EXPENSE) OTHER THAN PERMANENT FILE COPIES THEN IN SUCH HOLDER’S POSSESSION, AND
THE PERIOD OF EFFECTIVENESS OF SUCH REGISTRATION STATEMENT PROVIDED FOR ABOVE
SHALL BE EXTENDED BY THE NUMBER OF DAYS FROM AND INCLUDING THE DATE OF THE
GIVING OF SUCH NOTICE TO THE DATE HOLDERS OF REGISTRABLE SECURITIES SHALL HAVE
RECEIVED SUCH AMENDED OR SUPPLEMENTED PROSPECTUS PURSUANT TO THIS SECTION
4.5(K); AND

(L)                 USE COMMERCIALLY REASONABLE EFFORTS TO PROCURE THE
COOPERATION OF THE COMPANY’S TRANSFER AGENT IN SETTLING ANY OFFERING OR SALE OF
REGISTRABLE SECURITIES, INCLUDING WITH RESPECT TO THE TRANSFER OF PHYSICAL STOCK
CERTIFICATES INTO BOOK-ENTRY FORM IN ACCORDANCE WITH ANY PROCEDURES REASONABLY
REQUESTED BY THE HOLDERS OF REGISTRABLE SECURITIES OR THE UNDERWRITERS.

Section 4.6            Registration Expenses. Except as specifically provided
herein, all Registration Expenses incurred in connection with any registration,
qualification or compliance hereunder shall be borne by the holders of the
Acquired Shares proposed to be registered, pro rata on the basis of the
aggregate offering or sale price of the Acquired Shares proposed to be
registered.

Section 4.7            Participation in Underwritten Registrations. No holder of
Registrable Securities may participate in any registration hereunder that is
underwritten (whether in connection with a Piggyback Registration, Shelf
Registration or Demand Registration) unless such holder (i) agrees to sell its
Registrable Securities on the basis provided in any underwriting arrangements
reasonably approved by the Company, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and (iii) cooperates with the Company’s reasonable requests in
connection with such registration or qualification (it being understood that the
Company’s failure to perform its obligations hereunder, which failure is caused
by such holder’s failure to so cooperate, will not constitute a breach by the
Company of this Agreement).

Section 4.8            Suspension of Sales. Upon receipt of written notice from
the Company that a Registration Statement, prospectus or prospectus supplement
contains or may contain an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, each holder of Registrable Securities shall
forthwith discontinue disposition of Registrable Securities until the holder of
Registrable Securities has received copies of a supplemented or amended
prospectus or prospectus supplement, or until such holder is advised in writing
by the Company that the use of the prospectus and, if applicable, prospectus
supplement may be resumed, and, if so directed by the

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Company, such holder shall deliver to the Company (at the Company’s expense) all
hard copies, other than permanent file copies then in such holder’s possession,
of the prospectus and, if applicable, prospectus supplement covering such
Registrable Securities current at the time of receipt of such notice.  The total
number of days that any such suspension pursuant to this Section 4.8 may be in
effect in any 12-month period shall not exceed ninety (90).

Section 4.9            Rule 144; Legended Securities. Subject to Section 4.4,
the Company will use its reasonable best efforts to file the reports required to
be filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder, with a view to enabling such
holder of Registrable Securities to sell shares of Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the Securities Act. Upon the request of
any holder of Registrable Securities, the Company will deliver to such holder a
written statement as to whether it has complied with such information
requirements.

Section 4.10        Holdback. In consideration for the Company agreeing to its
obligations under this Agreement, each holder of Registrable Securities agrees
that if requested by the underwriter(s) managing any underwritten offering by
the Company of Common Shares or any securities convertible into or exchangeable
or exercisable for Common Shares, such holder shall (whether or not such holder
is participating in such offering) agree not to (other than pursuant to such
underwritten offering) Transfer any Common Shares, any other equity securities
of the Company or any securities convertible into or exchangeable or exercisable
for any equity securities of the Company without the prior written consent of
the Company or such underwriters during the period specified by the managing
underwriter(s) which period shall not exceed ten (10) days prior or ninety (90)
days following any registered offering of such securities by the Company.

Section 4.11        Delay of Registration; Furnishing Information.

(A)                NO HOLDER OF REGISTRABLE SECURITIES SHALL HAVE ANY RIGHT TO
OBTAIN OR SEEK AN INJUNCTION RESTRAINING OR OTHERWISE DELAYING ANY REGISTRATION
AS THE RESULT OF ANY CONTROVERSY THAT MIGHT ARISE WITH RESPECT TO THE
INTERPRETATION OR IMPLEMENTATION OF SECTION 4.1.

(B)               NO HOLDER OF REGISTRABLE SECURITIES SHALL USE ANY FREE WRITING
PROSPECTUS (AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT) IN CONNECTION WITH
THE SALE OF REGISTRABLE SECURITIES WITHOUT THE PRIOR WRITTEN CONSENT OF THE
COMPANY.

ARTICLE V
PREEMPTIVE RIGHTS

Section 5.1            Preemptive Rights.

(A)                FROM THE CLOSING DATE AND UNTIL THE FIRST DATE UPON WHICH NO
INVESTOR DESIGNEE IS ENTITLED HEREUNDER TO SERVE ON THE BOARD, IN THE EVENT THE
COMPANY PROPOSES TO ISSUE COMMON SHARES OR ANY SECURITIES EXERCISABLE,
CONVERTIBLE OR EXCHANGEABLE FOR SHARES OF ITS CAPITAL STOCK (COLLECTIVELY, THE
“PREEMPTIVE SECURITIES”), OTHER THAN (W) PURSUANT TO ANY EMPLOYEE STOCK OPTION
PLAN OF THE COMPANY, (X) PURSUANT TO ANY MERGER, SHARE EXCHANGE OR ACQUISITION,
(Y) PRO RATA

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distributions to all holders of Common Shares (including without limitation
stock dividends and stock splits) and (z) the issuance of employee stock options
and exercise thereof, the Company shall: 

 

(i)                 deliver to the Investors written notice setting forth in
reasonable detail (A) the terms and provisions of the Preemptive Securities
proposed to be issued (the “Proposed Securities”), (B) the price and other terms
of the proposed sale of such securities, (C) the amount of such securities
proposed to be issued, (D) the proposed closing date and (E) such other
information as the Investors may reasonably request in order to evaluate the
proposed issuance; and

 

(ii)               offer to issue to each Investor a portion of the Proposed
Securities equivalent to a percentage determined by dividing (x) the number of
Acquired Shares Beneficially Owned by such Investor prior to such issuance by
(y) the number of Common Shares issued and outstanding at such time.

(b)               The Investors must give notice to the Company of their
election to exercise the purchase rights hereunder within ten (10) Business Days
after receipt of such notice from the Company. 

(c)                Upon the expiration of the offering period described in
Section 5.1(b), or if any Investor shall default in paying for or purchasing the
Proposed Securities on the terms offered by the Company, the Company shall
thereafter be free to sell such Proposed Securities that such Investor has not
elected to purchase during the one hundred eighty (180) days following such
expiration on terms and conditions no more favorable to the purchasers thereof
than those offered to the Investors.  Any Proposed Securities offered or sold by
the Company after such 180-day period must be reoffered to the Investors
pursuant to this Section 5.1, subject to the terms hereof.

(d)               The election by the Investors not to exercise preemptive
rights under this Section 5.1 in any one instance shall not affect their rights
(other than in respect of a reduction in their percentage holdings) as to any
subsequent proposed issuance.  Any sale of such securities by the Company
without first giving the Investors the rights described in this Section 5.1
shall be void and of no force and effect, and the Company shall not register
such sale or issuance on the books and records of the Company.

ARTICLE VI
DEFINITIONS

Section 6.1            Defined Terms. Capitalized terms when used in this
Agreement have the following meanings:

“Acquired Shares” shall have the meaning set forth in the recitals and shall
also be deemed to refer to any securities issued in respect of Common Shares
received by the Investors pursuant to the Purchase Agreement, or in substitution
therefor, in connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization.

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“Affiliate” means, with respect to any Person, any Person who directly or
indirectly Controls, is Controlled by, or is under common Control with the
specified Person.  

“Agreement” has the meaning set forth in the preamble.

“Applicable Law” means all applicable provisions of (i) constitutions, statutes,
laws, rules, regulations, ordinances, codes or orders of any Governmental Entity
and (ii) any orders, decisions, injunctions, judgments, awards, decrees of or
agreements with any Governmental Entity.

“Beneficially Own” with respect to any securities shall mean having “beneficial
ownership” of such securities (as determined pursuant to Rule 13d-3 under the
Exchange Act without giving effect to the 60-day limitation on determining
beneficial ownership contained in Rule 13d-3(d)), including pursuant to any
agreement, arrangement or understanding, whether or not in writing.

“Board” has the meaning set forth in Section 1.1.

“Business” has the meaning set forth in Section 7.4.

“Business Day” means any day other than a day on which banks are required or
authorized to be closed in the City of New York or the country of Bermuda.

“Business Opportunities” has the meaning set forth in Section 7.4.

“Bye-laws” has the meaning set forth in Section 2.1(b).

“Closing” means the closing of the purchase and sale of the Acquired Shares
pursuant to the Purchase Agreement.

“Closing Date” means the date on which the Acquired Shares are purchased by the
Investors.

“Commission” means the Securities and Exchange Commission or any other federal
agency administering the Securities Act or any successor act.

“Common Shares” has the meaning set forth in the recitals.

“Company” has the meaning set forth in the preamble.

“Confidentiality Agreement” means that certain confidentiality agreement, dated
as of November 17, 2010, between EBF and the Company.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

“Controlled Affiliate” means any Affiliate of the specified Person that is,
directly or indirectly, Controlled by the specified Person. 

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“Demand Registration” has the meaning set forth in Section  4.3(a).

“EBF” has the meaning specified in the preamble.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Extraordinary Transaction” has the meaning set forth in Section 2.2(d).

“Finance Committee” has the meaning set forth in Section 1.1.

“First MP” has the meaning set forth in the preamble.

“First Threshold” has the meaning set forth in Section 1.2(a).

“Governmental Entity” means any foreign, federal or state government, or
regulatory or enforcement authority of any such government, or any court,
administrative agency or commission or other authority or instrumentality of any
such government or any SRO.

“Group” has the meaning assigned to such term in Section 13(d)(3) of the
Exchange Act.

“Investment Fund” means any investment fund or separate investment account that
is managed by the Investors or any of their respective Affiliates.

“Investor” and “Investors” have the meanings set forth in the preamble.

“Investor Designees” means individuals designated in writing to the Company by
the Investors for election or appointment to the Board.  

“Investor Director” means an Investor Designee who has been elected or appointed
to the Board.

“Investor Percentage Interest” means the percentage calculated by dividing (x)
the number of Common Shares that are as of the date of such calculation
Beneficially Owned by the Investors, in the aggregate, by (y) the number of
Acquired Shares purchased pursuant to the Purchase Agreement. 

“Mandatory Public Filings” has the meaning set forth in Section 2.2(o).

“Material Defect” has the meaning set forth in Section 4.5(g).

“Nonpublic Communication” has the meaning set forth in Section 2.2(n).

“Permitted Transferee”  means a Controlled Affiliate of an Investor that remains
a Controlled Affiliate of Investor and agrees to be bound by the provisions of
this Agreement as if it were an Investor hereunder by the execution of a
Joinder, in substantially the form attached hereto as Annex A.

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“Person” means an individual, a partnership, a joint venture, a corporation, a
limited liability company, a trust, an unincorporated organization or a
government or department or agency thereof.

“PFP” has the meaning set forth in Section 1.2(g).

“Piggyback Registration” has the meaning set forth in Section 4.1(a).

“Preemptive Securities” has the meaning set forth in Section 5.1(a).

“Proposed Securities” has the meaning set forth in Section 5.1(a)(i).

“Public Offering” means a public offering of equity securities of the Company
pursuant to an effective Registration Statement under the Securities Act (other
than a Special Registration).

“Purchase Agreement” has the meaning set forth in the recitals.

“Register,” “registered” and “registration” shall refer to a registration
effected by preparing and filing a Registration Statement in compliance with the
Securities Act and applicable rules and regulations thereunder, and the
declaration or ordering of effectiveness of such Registration Statement or (ii)
filing a prospectus and/or prospectus supplement in respect of an appropriate
effective Registration Statement on Form S-3.

“Registrable Securities” means the Acquired Shares held by the Investors
provided that the Acquired Shares shall cease to be Registrable Securities when
(i) they are sold pursuant to an effective Registration Statement under the
Securities Act, (ii) they are sold pursuant to Rule 144 under the Securities Act
(or any similar rule then in force), or (iii) they have ceased to be
outstanding. 

“Registration Request” has the meaning set forth in Section 4.3(a).

“Registration Expenses” means all (i) reasonable expenses incurred by the
Company in effecting any registration pursuant to this Agreement, including, all
registration and filing fees, Financial Industry Regulatory Authority, Inc.
fees, printing expenses, fees and disbursements of counsel for the Company,
“blue sky” fees and expenses and expenses of the Company’s independent
accountants in connection with any regular or special reviews or audits incident
to or required by any such registration and (iii) Selling Expenses.

“Registration Statement” means the prospectus and other documents filed with the
Commission to effect a registration under the Securities Act.

“Rights Agreement” means that certain Rights Agreement dated as of May 29, 2009
between the Company and Mellon Investor Services LLC.

“Second MP” has the meaning set forth in the preamble.

“Second Threshold” has the meaning set forth in Section 1.2(a).

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“Securities Act” has the meaning set forth in Section 2.1(e).

“Seller” has the meaning set forth in the recitals.

“Selling Expenses” means all underwriting discounts, selling commissions and
transfer taxes applicable to the sale of Registrable Securities hereunder, fees
and disbursements of counsel for any holders of any Registration Expenses
required by Applicable Law to be paid by a selling shareholder.

“Shelf Registration” has the meaning set forth in Section 4.2(a).

“Shelf Registration Statement” means a Registration Statement on Form S-3 (or
any successor or similar provision) or any similar short-form or other
appropriate Registration Statement that may be available at such time, in each
case for an offering to be made on a continuous or delayed basis pursuant to
Rule 415 (or any successor or similar provision) under the Securities Act
covering Registrable Securities.  To the extent  that the Company is a
“well-known seasoned issuer” (as such term is defined in Rule 405 (or any
successor or similar rule) of the Securities Act), a “Shelf Registration
Statement” shall be deemed to refer to an “automatic shelf Registration
Statement,” as such term is defined in Rule 405 (or any successor or similar
rule) of the Securities Act.

“Special Registration” means the registration of (i) equity securities and/or
options or other rights in respect thereof solely registered on Form S-4 or Form
S-8 (or any successor or similar forms) or (ii) shares of equity securities
and/or options or other rights in respect thereof to be offered to directors,
members of management, employees, consultants or sales agents, distributors or
similar representatives of the Company or its direct or indirect subsidiaries or
in connection with dividend reinvestment plans.

“Specified Persons” has the meaning set forth in Section 7.4.

“SRO” means (i) any “self regulatory organization” as defined in Section
3(a)(26) of the Exchange Act, or (ii) any other United States or foreign
securities exchange, futures exchange, commodities exchange or contract market
and (iii) any other securities exchange.

“Standstill Period” has the meaning set forth in Section 2.2(m).

“State Act” has the meaning set forth in Section 2.1(e).

“Transfer” means (i) any direct or indirect sale, assignment, disposition or
other transfer, either voluntary or involuntary, of any capital stock or
interest in any capital stock or (ii) in respect of any capital stock or
interest in any capital stock, to enter into any swap or any other agreement,
transaction or series of transactions that hedges or transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of such
capital stock or interest in capital stock, whether any such transaction, swap
or series of transactions is to be settled by delivery of securities, in cash or
otherwise.

Section 6.2            Terms Generally. The words “hereby,” “herein,” “hereof,”
“hereunder” and words of similar import refer to this Agreement as a whole and
not merely to the specific

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section, paragraph or clause in which such word appears.  All references herein
to Articles and Sections shall be deemed references to Articles and Sections of
this Agreement unless the context shall otherwise require.  The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.”  References to “$” or “dollars” mean United States dollars.  The
definitions given for terms in this Article VI and elsewhere in this Agreement
shall apply equally to both the singular and plural forms of the terms defined. 
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms.  References herein to any agreement
(including the Purchase Agreement) shall be deemed references to such agreement
as it may be amended, restated or otherwise revised from time to time.

ARTICLE VII
MISCELLANEOUS

Section 7.1            Term. This Agreement will be effective as of the date
hereof and, except as otherwise set forth herein, will continue in effect
thereafter until the earlier of (i) termination of this Agreement by the consent
of First MP and Second MP and the Company or their respective successors in
interest or (ii) termination of the Purchase Agreement prior to the Closing.

Section 7.2            No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities that violates
the rights granted to the holders of Registrable Securities in this Agreement.

Section 7.3            Confidentiality. The Investors and EBF agree (i) to keep
confidential all non-public information regarding the Company and its Affiliates
received through any Investor Director, and not to disclose or reveal any such
information to any Person other than its directors, officers, managers,
employees, agents, attorneys, consultants, shareholders, members and owners who
need to know such information, and (ii) not to use such non-public information
for any purpose other than evaluating or monitoring the investment by the
Investors in the Company, and (iii) not to use such non-public information in a
manner that is competitive against or otherwise harmful to the Company; provided
that nothing herein shall prevent the Investors from disclosing any such
information that (A) is or hereafter becomes part of the public domain without
any violation of this Agreement on the part of an Investor; (B) was within an
Investor’s possession prior to its being furnished to the Investor by the
Investor Director; (C) was or is hereafter received by an Investor or an
Investor Director from a third party not known by Investor to be under any
obligation of confidentiality to the Company, or (D) is required to be disclosed
by Applicable Law (provided that prior to such disclosure, the Investor shall
promptly notify the Company of any such disclosure to the extent legally
permitted).

Section 7.4            Investment Opportunities; Conflicts of Interest. The
Company expressly acknowledges and agrees that (a) the Investors and their
respective Affiliates (but excluding the Company and its subsidiaries from the
definition of Affiliates for purposes of this Section 7.4) and their respective
managers, directors, officers, shareholders, partners, members, employees,
representatives, and agents (including the Investor Directors) (collectively,
the “Specified Persons”) are permitted (i) to have and develop, and may
presently or in the future have and develop, investments, transactions, business
ventures, contractual, strategic or other business

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relationships, prospective economic advantages or other opportunities (the
“Business Opportunities”) in the lines of business conducted by the Company or
its subsidiaries (the “Business”) or in businesses that are and may be
competitive or complementary with the Business, for their own account or for the
account of any Person other than the Company or any of its subsidiaries, and
(ii) to direct any such Business Opportunities to any other Person, (b) none of
the Specified Persons will be prohibited by virtue of their investments in the
Company or his or her service as a Investor Director or otherwise from pursuing
and engaging in any such activities, (c) none of the Specified Persons will be
obligated to inform or present the Company or any of its subsidiaries or the
Board or the board of directors of any of the Company’s subsidiaries of or with
any such Business Opportunity, (d) neither the Company or any of its
subsidiaries will have or acquire or be entitled to any interest or expectancy
or participation (such right to any interest, expectancy or participation, if
any, being hereby renounced and waived) in any Business Opportunity as a result
of the involvement therein of any of the Specified Persons, and (e) the
involvement of any of the Specified Persons in any Business Opportunity will not
constitute a conflict of interest, breach of fiduciary duty, or breach of this
Agreement by such Persons with respect to the Company or any of its
subsidiaries. 

Section 7.5            Investor Actions. Any action taken by the Investors
pursuant to this Agreement shall be by the act of the holders of a majority of
the Acquired Shares held by all Investors.

Section 7.6            Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only upon the
prior written consent of the Company and the Investors. No failure or delay by
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by Applicable Law.

Section 7.7            Successors and Assigns. Except for any assignment by any
Investor to any Permitted Transferee, neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the Company and the Investors. This
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective permitted successors and assigns. Any attempted
assignment in violation of this Section 7.7 shall be void.

Section 7.8            Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any Applicable Law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

Section 7.9            Counterparts. This Agreement may be executed in two or
more counterparts (including by facsimile or electronic scanned image), all of
which shall be

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considered originals and one and the same agreement, and shall become effective
when counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that each party need not sign the same
counterpart.

Section 7.10        Entire Agreement. This Agreement (including the documents
and the instruments referred to in this Agreement) constitutes the entire
agreement and supersedes all prior term sheets, communications, correspondence,
discussions, agreements and understandings, both written and oral, between the
parties with respect to the subject matter of this Agreement, including the
Confidentiality Agreement.

Section 7.11        Governing Law; Jurisdiction. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York applicable to contracts made and wholly performed within such state,
without regard to any applicable conflicts of law principles. The parties hereto
agree that any suit, action or proceeding brought by any party to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby shall be brought exclusively
in any federal or state court located in the State of New York. Each of the
parties hereto submits to the exclusive jurisdiction of any such court in any
suit, action or proceeding seeking to enforce any provision of, or based on any
matter arising out of, or in connection with, this Agreement or the transactions
contemplated hereby and hereby irrevocably waives the benefit of jurisdiction
derived from present or future domicile or otherwise in such action or
proceeding. Each party hereto irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding in any such court or that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum.

Section 7.12        WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

Section 7.13        Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to seek injunction or injunctions or other equitable relief to prevent
breaches of this Agreement or to enforce specifically the performance of the
terms and provisions hereof in any court set forth in Section 7.11, in addition
to any other remedy to which they are entitled at law or in equity.

Section 7.14        No Third Party Beneficiaries. Nothing in this Agreement
shall confer any rights upon any Person other than the parties hereto and each
such party’s respective heirs, successors and permitted assigns, all of whom
shall be third party beneficiaries of this Agreement; provided that any
Permitted Transferee shall be an intended third party beneficiary hereof.

Section 7.15        Notices. All notices and other communications in connection
with this Agreement shall be in writing and shall be deemed given if delivered
personally, sent via facsimile (with confirmation), mailed by registered or
certified mail (return receipt requested) or

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delivered by an express courier (with confirmation) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):

If to the Company, to:

 

Primus Guaranty, Ltd.
Clarendon House
2 Church Street
Hamilton HM 11 Bermuda
Attention:  Secretary

with a copy to:

 

Primus Asset Management, Inc. 
360 Madison Avenue
New York, NY 10017
Attention:  General Counsel
Facsimile:  (212) 697-3731

 

with a copy (which shall not constitute notice) to:

 

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, NY  10019

Attention:  David E. Shapiro

Facsimile:  (212) 403-2000

 

If to any Investor or EBF, to it:

 

c/o EBF & Associates, L.P.

601 Carlson Parkway

Suite 200

Minnetonka, MN 55305

Attention:  Vince Vertin

Facsimile:  (952) 476-7201

 

with a copy (which shall not constitute notice) to:

 

EBF & Associates, L.P.

601 Carlson Parkway, Suite 200

Minnetonka, MN  55305

Attention: Mike Sullivan

Facsimile: (952) 476-7201

 

The remainder of this page intentionally left blank.

 

25

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement by
their authorized representatives as of the date first above written.

 

PRIMUS GUARANTY, LTD.

 

 

 

By: /s/ Richard Claiden                                             
Name:  Richard Claiden

Title:    Chief Executive Officer

 

 

MERCED PARTNERS LIMITED PARTNERSHIP

By: /s/ Thomas G. Rock                                                 
     Its Authorized Representative

 

MERCED PARTNERS III (CAYMAN), L.P.

By:  /s/ Thomas G. Rock                                                
     Its Authorized Representative

 

EBF & ASSOCIATES, L.P.

By:  /s/ Thomas G. Rock                                                
     Its Authorized Representative

 

 

 

 

[Signature Page to Shareholders Agreement]

 

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Annex A – Form of Joinder

 

By execution of this Joinder, the undersigned agrees to become a party to that
certain Shareholders Agreement, dated as of December 30, 2010 (the “Agreement”),
among Primus Guaranty, Ltd., the Investors and EBF, as defined therein.  By
execution of this Joinder, effective as of the date below, the undersigned shall
have all the rights, and shall observe all the obligations, of an Investor.

 

Investor:          ______________________    (print)

 

Address for notices:                                                    With
copies to:

                                                                                   

                                                                     
                                                                         

                                                                     
                                                                         

                                                                 
                                                                             

                                                                     
                                                                         

                                                                                                                                                                                   
                                                                                                                                               

                                                                                                                                                                                   
                                                                                                                                                           

                                                                                                                                                                                   
                                                                                                                                                           

 

 

 

By:      _______________________________

Name: 

Title:

Date:  

 

 

Accepted and Agreed:

 

PRIMUS GUARANTY, LTD.

 

 

By:      _______________________________

Name:

Title:

 

 

[Joinder to Shareholders Agreement]

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Annex B – Investor Ownership

 

Investor

Number of Shares

Merced Partners Limited Partnership

3,678,071

Merced Partners III (Cayman), L.P.

7,587,929

 

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Schedule 3.3(h)

 

Registration Rights Agreement, dated as of October 5, 2004, among Primus
Guaranty, Ltd. and the Holders (as defined therein) as amended by First
Amendment to Registration Rights Agreement, dated as of January 2006, among
Primus Guaranty, Ltd. and the Holders (as defined therein). 

 

 

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