Exhibit 10.48

 

 

INVESTMENT AGREEMENT

dated as of May 20, 2008

between

MF GLOBAL LTD.

and

J.C. FLOWERS II L.P.

 

 

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TABLE OF CONTENTS

 

        

Page

Recitals:   1 Article I Other Offerings; Backstop; Closing 1.1    Other
Offerings   1 1.2    Backstop   2 1.3    Closing   2 1.4    Interpretation   5
Article II Representations and Warranties 2.1    Disclosure   5 2.2   
Representations and Warranties of the Company   6 2.3    Representations and
Warranties of the Investor   18 Article III Covenants 3.1    Reasonable Best
Efforts   20 3.2    Expenses   20 3.3    Publicity   20 3.4    Sufficiency of
Outstanding Common Shares   20 3.5    Withholding of Tax   21 3.6    Anti-Trust
Clearance   21 3.7    Investor Representatives   21 3.8    Directors   25 3.9   
Conduct of Business   25 3.10    Certain Tax Matters   26 3.11    Certain
Adjustments   27

 

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Article IV Additional Agreements of the Investor 4.1    Standstill Agreement  
28 4.2    Lock-Up   30 4.3    Transfer Restrictions   31 4.4    Purchase for
Investment   33 4.5    Legend   33 4.6    Indemnity   34 Article V Miscellaneous
5.1    Survival   36 5.2    Termination   37 5.3    Amendment   38 5.4    Waiver
of Conditions   38 5.5    Expenses   38 5.6    Counterparts and Facsimile   38
5.7    GOVERNING LAW; SUBMISSION TO JURISDICTION, ETC.   38 5.8    Remedies   39
5.9    Notices   39 5.10    Entire Agreement, Etc.   40 5.11    Definitions of
“subsidiary” and “Affiliate”   41 5.12    Severability   41 5.13    No
Third-Party Beneficiaries   41

 

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LIST OF ANNEXES

 

Annex A    Purchased Securities Annex B    Certificate of Designations Annex C
   Registration Rights Agreement Annex D    Form of Opinion of Conyers Dill &
Pearman Annex E    Form of Opinion of Sullivan & Cromwell LLP Annex F    Bank
Financing/Other Debt Financing Annex G    Current Report of Form 8-K Annex H   
Amendment of Rights Agreement Annex I    Investor Representative Letter of
Resignation Annex J    Form of Assignment

LIST OF SCHEDULES

 

Schedule 1.3(c)    Company Regulatory Approvals Schedule 2.2(b)(ii)   
Obligations to Sell or Issue Equity Schedule 2.2(b)(iii)    Registration Rights
Schedule 2.2(g)    Proceedings Schedule 2.2(h)    Unauthorized Trading Matters
Schedule 2.2(i)    Liabilities and Obligations Schedule 2.2(j)    Material
Adverse Changes Schedule 2.2(m)    Property and Leases Schedule 2.2(p)   
Agreements with Regulatory Entities Schedule 2.2(r)    Tax Matters

 

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Schedule 2.3(b)(iii)    Investor Regulatory Approvals Schedule 3.7    Investor
Representatives Schedule 4.3(b)    Competitors Schedule 5.5    Expenses

 

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INDEX OF DEFINED TERMS

 

Term

  

Location of
Definition

Actual Number

   Recitals

Affiliate

   5.11(b)

Agreement

   Preamble

Bankruptcy Exceptions

   2.2(d)(i)

beneficial ownership; beneficially owned

   4.1(d)

Certificate of Designations

   Recital B

Change of Control

   4.1(c)

Closing

   1.3(a)

Closing Date

   1.3(a)

Code

   2.2(r)(vii)

Commission

   2.1(c)

Common Shares

   Recital A

Company

   Preamble

Company Financial Statements

   2.2(h)(iii)

Company Plan

   2.2(s)(i)

Company Reports

   2.2(h)(i)

Competitor

   4.3(b)

Current 8-K Report

   2.1(c)

De Minimis Claim

   4.6(e)

Equity Securities

   4.1(d)

ERISA

   2.2(s)(i)

Exchange Act

   2.1(c)

Form S-1

   2.1(c)

GAAP

   2.2(i)

Hedging Transaction

   4.2

HSR Act

   3.6

IPO Registration Statement

   2.1(c)

Intellectual Property

   2.2(l)

Indemnified Party

   4.6(c)

Indemnifying Party

   4.6(c)

Investor

   Preamble

Investor Material Adverse Effect

   2.3(b)(ii)

Investor Representative

   3.7

IRS

   1.3(d)(ii)

Lock-Up Period

   4.2

Losses

   4.6(a)

Material Adverse Effect

   2.2(a)

Maximum Number

   Recitals

Minimum Number

   Recitals

Money Laundering Laws

   2.2(o)(iv)

 

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NYSE

   1.3(c)

Offering

   1.1

One Director Amount

   3.7(a)

Permitted Transferee

   4.3(b)(ii)

PFIC

   2.2(r)(ix)

PFIC Annual Information Statement

   3.10(c)

Pre-Closing Period

   3.9

Publicly Disclosed Information

   2.1(c)

Purchase

   1.2

Purchased Securities

   1.2

QEF Election

   3.10(c)

Registration Agreement

   1.3(b)

Regulatory Agreement

   2.2(p)

Regulatory Entities

   1.3(c)

Sarbanes-Oxley Act

   2.2(o)(iii)

SEC Filings

   2.1(c)

SEC Reports

   2.1(c)

Securities Act

   2.2(a)

Series A Shares

   Recital B

Significant Subsidiary; Significant Subsidiaries

   2.2(a)

Standstill Termination Event

   4.1(c)

subsidiary

   5.11(a)

Tax

   2.2(r)(ix)

Tax Returns

   2.2(r)(ix)

Threshold Amount

   4.6(e)

Transaction Documents

   Recital B

Transfer

   4.3(a)

Transfer Notice

   4.3(b)

Two Director Amount

   3.7(a)

Voting Shares

   4.1(d)

 

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INVESTMENT AGREEMENT, dated May 20, 2008 (this “Agreement”), between MF Global
Ltd., a Bermuda exempted company (the “Company”), and J.C. Flowers II L.P.(the
“Investor”).

RECITALS:

A. The Company. As of the date hereof, the Company has (i) 1,000,000,000
authorized common shares, $1.00 par value per share (“Common Shares”), of which,
as of April 30, 2008 120,046,739 shares were issued and outstanding; and
(ii) 200,000,000 authorized preference shares, $1.00 par value per share, of
which no shares are outstanding.

B. The Issuances. The Company currently intends (i) to issue and sell an amount
of a series of its preference shares having the designation, powers, preferences
and rights set forth in a certificate of designations in the form attached as
Annex B (the “Certificate of Designations” and such series of preference shares,
the “Series A Shares”) in one or more private placements and/or public offerings
and (ii) to issue and sell to the Investor, and the Investor intends to purchase
from the Company, a number (the “Actual Number”) of Series A Shares equal to
(x) the maximum number specified in Annex A (the “Maximum Number”) minus
(y) such number, if any, as may be issued and sold in any offerings of the kind
referenced in clause (i) above; provided that the Actual Number shall not be
less than the minimum number specified in Annex A (the “Minimum Number”). For
purposes of this Agreement, the term “Transaction Documents” refers collectively
to this Agreement, the Registration Agreement (as hereinafter defined) and the
Certificate of Designations, in each case as amended, modified or supplemented
from time to time in accordance with their respective terms.

NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:

Article I

OTHER OFFERINGS; BACKSTOP; CLOSING

1.1 Other Offerings. The Company has the right to issue and sell Series A Shares
in one or more private placements and/or public offerings from time to time and
at any time after the date hereof but before the Closing Date on such terms and
conditions as it shall determine in its sole discretion (each such transaction,
an “Offering”); provided that the terms and conditions of any Offering taken as
a whole shall not be more favorable to the purchasers than those relating to the
Purchase (as defined below) and the aggregate number of Series A Shares issued
in such Offerings and the Purchased Securities shall not be greater than
7,500,000.

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1.2 Backstop. On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to sell to the Investor, and the Investor agrees
to purchase from the Company, at the Closing (as hereinafter defined), the
Actual Number of Series A Shares at an aggregate purchase price calculated by
multiplying such number by the price per share specified on Annex A, subject to
adjustment as provided in Section 1.3(b) (the “Purchase”). The Series A Shares
to be purchased by the Investor pursuant to this Section 1.2 are herein called
the “Purchased Securities”.

1.3 Closing.

(a) On the terms and subject to the conditions set forth in this Agreement, the
closing of the Purchase (the “Closing”) will take place at a location mutually
agreed to by the parties hereto at 10:00 a.m., New York time, on the earlier of
(i) July 31, 2008 or (ii) the date five business days after the receipt by the
Investor of a notice from the Company that all conditions precedent set forth in
Section 1.3(e) have been satisfied or waived, but in no event earlier than
June 30 2008, or at such other place, time and date as shall be agreed between
the Company and the Investor. The time and date on which the Closing occurs is
referred to in this Agreement as the “Closing Date”.

(b) Subject to the fulfillment or waiver of the conditions to the Closing in
Sections 1.3(c) and (d), at the Closing, (i) the Company will deliver to the
Investor the Purchased Securities, as evidenced by one or more certificates
dated the Closing Date and bearing appropriate legends as hereinafter provided
for, registered in the register of members of the Company in such Investor’s
name and (ii) the Purchaser will deliver to the Company by wire transfer of
immediately available United States funds to a bank account that has been
designated by the Company no later than two business days prior to the Closing
Date an amount equal to (x) the product of the number of Purchased Securities
multiplied by the price per Series A Share specified on Annex A less (y) an
amount equal to 3.0% of the product of (A) the price per Series A Share
specified on Annex A multiplied by (B) the difference between the Maximum Number
and the Actual Number. Each of the Company and the Investor agree to execute and
deliver to the other party at Closing a Registration Rights Agreement (the
“Registration Agreement”) in the form of Annex C.

(c) The respective obligations of each of the Investor and the Company to
consummate the Closing is subject to the fulfillment (or written waiver by the
Investor or the Company, as applicable) prior to the Closing of the condition
that (i) any approvals or authorizations of or notices to (or expiration of any
applicable waiting periods of) the governmental and self-regulatory authorities,
domestic and foreign, having jurisdiction over the Company and its subsidiaries
(collectively, “Regulatory Entities”) specified on Schedule 1.3(c) have been
received or made (or occurred) as applicable, (ii) the Company shall have been
advised by the NYSE that the Common Shares issuable upon conversion of the
Purchased Securities will be listed on the New York Stock Exchange (“NYSE”),
subject to official notice of issuance and (iii) there shall be no

 

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effective injunction, writ, preliminary restraining order or any order of any
nature issued by a court of competent jurisdiction directing that the
transactions provided for herein or any of them not be consummated as herein
provided.

(d) The obligation of the Company to consummate the Closing is also subject to
the fulfillment (or waiver by the Company) at or prior to the Closing of each of
the following conditions:

(i) (A) the representations and warranties of the Investor set forth in this
Agreement shall be true and correct (without regard to “materiality” or
“Material Adverse Effect” qualifications included therein) as though made on and
as of the Closing Date (other than representations and warranties that by their
terms speak as of another date, which representations and warranties shall be
true and correct as of such other date) except to the extent that the failure of
such representations and warranties to be so true and correct, individually or
in the aggregate, does not have and would not reasonably be expected to have an
Investor Material Adverse Effect, (B) the Investor shall have performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing and (C) the Company shall have received a
certificate, dated the Closing Date, signed by an executive officer of the
Investor, certifying on behalf of the Investor that the conditions specified in
the foregoing clauses (A) and (B) have been fulfilled;

(ii) the Company shall have received from the Investor a duly executed, valid,
accurate and properly completed Internal Revenue Service (the “IRS”) Form W-9 or
an appropriate IRS Form W-8 evidencing the Investor’s entitlement to an
exemption from backup withholding; and

(iii) the Investor shall have duly executed and delivered to the Company the
Registration Agreement.

(e) The obligation of the Investor to consummate the Closing is also subject to
the fulfillment (or waiver by the Investor) at or prior to the Closing of each
of the following conditions:

(i) (A) the representations and warranties of the Company set forth in clause
(3) of Section 2.2(j) shall be true and correct in all respects as of the
Closing Date as though made on and as of the Closing Date, (B) except for the
representations and warranties of the Company set forth in clause (3) of
Section 2.2(j), each of the representations and warranties of the Company set
forth in this Agreement shall be true and correct (without regard to
“materiality” or “Material Adverse Effect” qualifications included therein) as
of the Closing Date as though made on and as of the Closing Date (other than
representations and warranties that by their terms speak as of another date,
which representations and warranties

 

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shall be true and correct as of such other date), except to the extent that the
failure of such representations and warranties to be so true and correct,
individually or in the aggregate, does not have and would not reasonably be
expected to have a Material Adverse Effect, (C) the Company shall have performed
in all material respects all obligations required to be performed by it under
this Agreement at or prior to the Closing and (D) the Investor shall have
received a certificate, dated the Closing Date, signed by the Chief Executive
Officer or the Chief Financial Officer of the Company, certifying on behalf of
the Company that the conditions specified in the foregoing clauses (A), (B) and
(C) have been fulfilled;

(ii) the Company shall have duly executed and delivered to the Investor the
Registration Agreement;

(iii) the Investor shall have received from Conyers Dill & Pearman and/or
Sullivan & Cromwell LLP, counsel for the Company in Bermuda and the U.S.
respectively, legal opinions addressed to the Investor, dated as of the Closing
Date, in the forms attached as Annexes D and E, respectively; and

(iv) On or before the Closing Date, the Company shall have received debt and/or
equity financing in an aggregate amount equal to at least $750,000,000 minus the
amount of proceeds from the sale of the Purchased Securities to the Investor,
from one or more financial institutions or other persons pursuant to credit or
other agreements, in public and/or private offerings of senior, subordinated or
convertible debt, common, convertible preferred or preferred equity or rights to
acquire any of the foregoing or otherwise, provided that (1) to the extent such
financing involves bank financing (or any financing pursuant to a credit or
similar agreement), such bank financing shall have terms that in the aggregate
are no less favorable to the Company than the terms contemplated in Annex F –
Bank Financing, (2) to the extent such financing involves other debt financing,
such other debt financing shall have terms that in the aggregate are no less
favorable to the Company than the terms contemplated in Annex F – Other Debt
Financing, and (3) to the extent such financing involves equity financing the
Investor shall be entitled to any adjustment under Section 3.11 that may apply
in respect of such equity financing. For the avoidance of doubt, convertible
debt shall be treated as other debt financing and equity financing and shall be
subject to both clause (2) and clause (3) above. The financing to be received by
the Company as provided in the first sentence of this clause (iv) must either be
received by the Company at or prior to the Closing or all the conditions to the
lenders’ (or investors’) obligations to provide such financing (other than a
condition that the Closing shall have occurred) must be satisfied or waived at
or prior to the Closing.

It is understood and agreed that the Company intends to issue and sell
additional Series A Shares in connection with one or more Offerings concurrently
with or shortly before the Closing. The consummation of any such Offering shall
not be a condition to the obligations of the Investor under this Agreement.

 

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1.4 Interpretation. When a reference is made in this Agreement to “Recitals,”
“Articles,” “Sections” or “Annexes,” such reference shall be to a Recital,
Article or Section of, or Annex to, this Agreement unless otherwise indicated.
The terms “herein”, “hereof”, “hereto” and the like refer to this Agreement in
its entirety. The terms defined in the singular have a comparable meaning when
used in the plural, and vice versa. The table of contents and headings contained
in this Agreement are for reference purposes only and are not part of this
Agreement. Whenever the words “include,” “includes” or “including” are used in
this Agreement, they shall be deemed followed by the words “without limitation.”
No rule of construction against the draftsperson shall be applied in connection
with the interpretation or enforcement of this Agreement, as this Agreement is
the product of negotiation between sophisticated parties advised by counsel. All
references to “$” or “dollars” mean the lawful currency of the United States of
America. Except as expressly stated in this Agreement, all references to any
statute, rule or regulation are to the statute, rule or regulation as amended,
modified, supplemented or replaced from time to time (and, in the case of
statutes, include any rules and regulations promulgated under the statute) and
include any successor or analogous statute, rule or regulation that replaces the
same.

Article II

REPRESENTATIONS AND WARRANTIES

2.1 Disclosure.

(a) Investor’s Review. The Investor acknowledges that it has conducted a review
and analysis of the business, assets, financial condition, result of operations,
cash plans, management and prospects of the Company and its subsidiaries that
the Investor considers sufficient for purposes of deciding whether or not to
make the Purchase. The Investor further acknowledges that it has had full access
to all the information, and has had an opportunity to ask all the questions of
and has received all the answers from the Company’s management and other
representatives, regarding the Company’s business, assets, financial condition,
results of operations, cash flow, management and prospects (including the events
and matters referenced in the Publicly Disclosed Information), and the terms and
conditions of the Purchase and the Purchased Securities, that the Investor
considers necessary or appropriate for deciding whether or not to make the
Purchase. In addition, in connection with the Purchase, the Investor has had
such opportunity to consult with its own counsel, tax advisers and other
professional advisers as the Investor believes is appropriate.

 

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(b) Investor’s Non-Reliance. The Investor acknowledges and agrees that neither
the Company or any of its Affiliates, nor any person representing the Company or
any of its Affiliates, has made to the Investor or any of its representatives,
and the Investor is not relying upon, any representation, warranty or agreement
with respect to the Company, the Purchase, the Purchased Securities or the
Common Shares issuable upon conversion of the Purchased Securities, other than
the representations, warranties and agreements of the Company expressly
contained in this Agreement and the other Transaction Documents. Without
limiting the foregoing, the Investor acknowledges that neither the Company nor
any such other person has made, and the Investor is not relying upon, any
representation, warranty or agreement with respect to the accuracy or
completeness of the information (written or oral) provided to the Investor in
connection with its prospective investment in the Purchased Securities, or with
respect to the appropriateness, suitability or sufficiency of such information
for the purpose of enabling the Investor to evaluate such investment, other than
the representations, warranties and agreements of the Company expressly
contained in this Agreement.

(c) Publicly Disclosed Information. As used herein, “Publicly Disclosed
Information” means all information set forth or incorporated by reference in
(i) the Company’s Registration Statement on Form F-1 (file no. 333-143395) on
file with the Securities and Exchange Commission (the “Commission”) and as it
became effective on July 18, 2007, together with the related final prospectus
dated such date and on file with the Commission (together, the “IPO Registration
Statement”), (ii) the Company’s Registration Statement on Form S-1 (file no.
333-114079) as filed with the Commission on February 5, 2008 but not declared
effective by the Commission (the “Form S-1”), (iii) the Company’s quarterly and
current reports on Forms 10-Q and 8-K and registration on Form 8-A filed with or
furnished to the Commission under Sections 13(a), 14(a) or 15(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”) on or after July 18, 2007
and prior to the date hereof (collectively, the “SEC Reports”) and (iv) the
Company’s draft current report on Form 8-K to be filed on or about May 20, 2008,
including the draft press release included as an exhibit thereto, attached as
Annex G (the “Current 8-K Report”). The Company represents and warrants that it
will file the Current 8-K Report with the Commission on or about May 20, 2008 in
substantially the form set forth in Annex G. The IPO Registration Statement, the
Form S-1 and the SEC Reports, together with all other reports, schedules, forms,
registration statements and other documents required to be filed by the Company
with the SEC since January 1, 2006 and any reports, schedules, forms,
registration statements and other documents required to be filed with the SEC
subsequent to the date hereof, are herein collectively called the “SEC Filings”.

2.2 Representations and Warranties of the Company. The Company represents and
warrants to the Investor that as of the date hereof and as of the Closing Date:

(a) Organization, Authority and Significant Subsidiaries. The Company has been
duly incorporated and is validly existing as an exempted company in

 

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good standing under the laws of Bermuda, with corporate power and authority to
own or lease its properties and assets and conduct its business in all material
respects as currently conducted, and, except as, individually or in the
aggregate, has not had or would not reasonably be expected to have a Material
Adverse Effect, has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business so
as to require such qualification; each subsidiary of the Company that is a
“significant subsidiary” within the meaning of Rule 1-01(w) of Regulation S-X
under the Securities Act of 1933, as amended (the “Securities Act”)
(individually a “Significant Subsidiary” and collectively the “Significant
Subsidiaries”), has been duly organized and is validly existing in good standing
under the laws of its jurisdiction of organization. As used herein, “Material
Adverse Effect” means any event, change, development or effect that is material
and adverse to the business, assets, results of operations or financial
condition of the Company and its subsidiaries taken as a whole, or on the
ability of the Company to consummate the Purchase and the other transactions
contemplated for it by this Agreement.

(b) Capitalization.

(i) The authorized and outstanding share capital of the Company (but without
giving effect to the issuance of up to the Maximum Number of Series A Shares
plus any additional Series A Shares that may be issued in the Offerings and of
Common Shares issuable upon conversion thereof) is set forth in Recital A,
(ii) all of the issued and outstanding Common Shares of the Company have been
duly and validly authorized and issued and are fully paid and non-assessable and
were not issued in violation of any preemptive rights, resale rights, rights of
first refusal or similar rights and (iii) all of the issued and outstanding
shares of capital stock and all other equity interests of each Significant
Subsidiary have been duly and validly authorized and issued, are fully paid and
non-assessable, were not issued in violation of any pre-emptive rights, resale
rights, rights of first refusal or similar rights, and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims. It is understood and agreed that the Certificate of Designations may
be amended by the Company prior to Closing solely to provide that the total
number of authorized Series A Shares may be increased up to 7,500,000.

(ii) Except as set forth in Schedule 2.2(b)(ii) and as contemplated by this
Agreement, there are no existing options, warrants, calls, preemptive (or
similar) rights, subscription or similar rights, agreements, arrangements or
commitments of any character obligating the Company to issue, transfer or sell,
or cause to be issued, transferred or sold, any shares of capital stock of the
Company or other equity interests in the Company or any securities convertible
into or exchangeable for such shares of capital stock or other equity interests,
and there are no outstanding contractual obligations of the Company to
repurchase, redeem or otherwise acquire any of its capital shares or other
equity interests.

 

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(iii) The Company has not made, issued or declared, and will not make, issue or
declare prior to Closing, any dividends or other distributions in cash, capital
stock or other property with respect to any of its capital stock. Except as
contemplated by this Agreement or as set forth on Schedule 2.2(b)(iii), the
Company is not, and will not be prior to Closing, a party to any agreement
pursuant to which it has agreed or will agree for the benefit of any person, or
granted any person the right to require the Company, to register with the
Commission any securities issued by the Company held or to be held by such
person.

(iv) The Common Shares are listed on the NYSE. The Company has taken no action
designed to, or that is likely to have the effect of, terminating the trading of
the Common Shares on the NYSE or de-registering the Company under the Exchange
Act, nor has the Company received any notification that the Commission or NYSE
is contemplating terminating such registration or listing.

(v) The consummation of the transactions contemplated by this Agreement and the
issuance of the Series A Shares (or the Common Shares upon conversion thereof)
will not trigger the anti-dilution provisions or other price adjustment
mechanisms of any outstanding subscriptions, options, calls, warrants,
commitments, contracts, preemptive rights, rights of first refusal, demands,
conversion rights or other agreements or arrangements of any character or nature
whatsoever under which the Company is or may be obligated to issue or acquire
shares of any of its capital stock.

(vi) No bonds, debentures, notes or other indebtedness having the right to vote
on any matters on which the stockholders of the Company may vote are issued and
outstanding.

(c) The Purchased Securities. The Purchased Securities and the Common Shares
issuable upon conversion of the Purchased Securities are duly authorized by all
necessary corporate action on the part of the Company and, when issued and
delivered as provided in this Agreement, will be duly and validly issued, fully
paid and nonassessable, will have the rights set forth in the Certificate of
Designations and the Company’s bye-laws and memorandum of association, as
applicable, and the issuance thereof will not be subject to any preemptive,
subscription or similar rights.

(d) Authorization and Enforceability of Transaction Documents.

(i) The Company has the corporate power and authority to execute and deliver the
Transaction Documents to which it is a party and to carry out its

 

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obligations hereunder and thereunder (which includes the issuance of the
Purchased Securities and the Common Shares issuable upon conversion of the
Purchased Securities). The execution, delivery and performance by the Company of
the Transaction Documents to which it is a party and the consummation by it of
the transactions contemplated hereby and thereby for it have been duly
authorized by all necessary corporate action on the part of the Company and its
members, and no further approval or authorization is required on the part of the
Company or its members for such purpose. The Transaction Documents to which the
Company is a party are or will be, assuming the due authorization, execution and
delivery by each of the other parties hereto and thereto, valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and general equitable principles (“Bankruptcy
Exceptions”).

(ii) The execution, delivery and performance by the Company of the Transaction
Documents to which it is a party, the consummation by it of the transactions
contemplated hereby and thereby for it and compliance by the Company with any of
the provisions hereof and of the other Transaction Documents will not
(x) violate, conflict with, or result in a breach of any provision of, or
constitute a change of control under, or constitute a default (or an event that,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the creation
of, any lien, security interest, charge or encumbrance upon any of the assets of
the Company or any Significant Subsidiary under any of the terms, conditions or
provisions of (A) its memorandum of association or bye-laws or (B) any note,
bond, mortgage, indenture, deed of trust, loan agreement, license, lease,
agreement, Company Plan or other instrument or obligation to which the Company
or any Significant Subsidiary is a party or by which it or any Significant
Subsidiary may be bound, or to which the Company or any Significant Subsidiary
or any of the assets of the Company or any Significant Subsidiary may be
subject, or (y) violate any statute, rule or regulation or any judgment, ruling,
order, writ, injunction or decree applicable to the Company or any Significant
Subsidiary or any of their respective assets except, in the case of clauses
(x)(B) and (y), for those occurrences that, individually or in the aggregate,
have not had and would not reasonably be expected to have a Material Adverse
Effect.

(iii) To the Company’s knowledge, no notice to, filing with, exemption from or
review by, or authorization, consent or approval of, any Regulatory Entity is
required to be given, made or obtained by the Company in connection with the
Purchase and the other transactions contemplated for it by the Transaction

 

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Documents, (x) except as set forth on Schedule 1.3(c), (y) except as may be
necessary in connection with the registration and offering of securities as
provided in the Registration Agreement and (z) except for the listing of the
Common Shares issuable upon conversion of the Purchased Securities on the NYSE
as provided in Section 3.4.

(e) Knowledge as to Conditions. As of the date of this Agreement, the Company
knows of no reason why any regulatory approvals and, to the extent necessary,
any other approvals, authorizations, filings, registrations, and notices
required or otherwise a condition to the consummation of the transactions
contemplated by the Transaction Documents are not reasonably likely to be
obtained.

(f) Permits. The Company and each subsidiary have all permits, licenses,
authorizations, orders and approvals of, and have made all filings, applications
and registrations with, any Regulatory Entity that are required on the part of
the Company or its subsidiaries in order to carry on their business as presently
conducted, except where the failure to have such permits, licenses,
authorizations, orders and approvals or the failure to make such filings,
applications and registrations, individually or in the aggregate, has not had
and would not be reasonably likely to have a Material Adverse Effect; and all
such permits, licenses, authorizations, orders and approvals are in full force
and effect and, to the knowledge of the Company, no suspension or cancellation
of any of them is threatened, and all such filings, applications and
registrations are current, except where the absence, suspension, cancellation or
non-currency of any thereof, individually or in the aggregate, has not had and
would not be reasonably likely to have a Material Adverse Effect.

(g) Proceedings. Except as disclosed in Schedule 2.2(g), there is no claim,
action, suit or governmental or regulatory proceeding or investigation pending
or, to the Company’s knowledge, threatened against the Company or any of its
subsidiaries, nor is the Company or any of its subsidiaries subject to any
order, judgment or decree, in each case, that, individually or in the aggregate,
has had or would reasonably be expected to have a Material Adverse Effect.

(h) SEC Filings; Company Financial Statements. Except as set forth in Schedule
2.2(h):

(i) Since July 18, 2007, the Company and each subsidiary of the Company has
timely filed all material reports, registrations, documents, filings, statements
and submissions, together with any amendments thereto, that it was required to
file with any Regulatory Entity (the foregoing, collectively, the “Company
Reports”) and has paid all material fees and assessments due and payable in
connection therewith. As of their respective dates of filing, the Company
Reports complied in all material respects with all statutes and applicable rules
and regulations of the applicable Regulatory Entities. To the

 

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knowledge of the Company, there are no outstanding comments from the SEC or any
other Regulatory Entity with respect to any Company Report. With respect to the
Company Reports other than the SEC Filings, such Company Reports were complete
and accurate in all material respects as of their respective dates.

(ii) The SEC Filings, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and none of such documents,
as of its date or if amended, as of the date of such amendment, as the case may
be, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading.
The Current 8-K Report and each SEC Filing made after the date hereof and prior
to the Closing, when filed with the Commission, will conform in all material
respects to the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder, and will not when filed with the Commission
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading.

(iii) The consolidated balance sheets of the Company and its subsidiaries and
the related consolidated statements of income, stockholders’ equity and cash
flow, together with the notes thereto (the “Company Financial Statements”),
included or incorporated by reference in any Company Report filed with the SEC
prior to the date of this Agreement, (1) have been prepared from, and are in
accordance with in all material respects, the books and records of the Company
and its subsidiaries, (2) complied as to form, as of their respective date of
filing with the SEC, in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, (3) present fairly in all material respects the consolidated
financial position of the Company and its subsidiaries as of the dates specified
therein and the consolidated results of their operations, changes in
stockholders’ equity and cash flows of the Company and its subsidiaries for the
periods specified therein, subject, in the case of any unaudited financial
statements, to normal recurring year-end adjustments and (4) except as may be
stated therein, have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent basis during
the periods involved.

(iv) PricewaterhouseCoopers LLP, who have certified certain financial statements
of the Company and its subsidiaries, are independent public accountants with
respect to the Company as required by the Securities Act and the rules and
regulations of the Commission and the Public Company Accounting Oversight Board.

 

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(v) The Company intends to file its annual report on Form 10-K for the fiscal
year ended March 31, 2008 with the Commission on or before June 30, 2008 and to
its knowledge, after due inquiry, (x) the Company will be able to make such
filing by such date or (y) such filing will be accompanied by an unqualified
audit opinion from PricewaterhouseCoopers LLP.

(i) Liabilities and Obligations. The Company and its subsidiaries do not have
any liabilities or obligations (accrued, absolute, contingent or otherwise) of a
nature that would be required to be accrued or reflected in a consolidated
balance sheet prepared in accordance with GAAP, other than liabilities or
obligations (i) that are reflected on, reserved against or disclosed in the
notes to the Company’s consolidated balance sheet included in the Company’s
quarterly report on Form 10-Q for the fiscal quarter ended December 31, 2007,
(ii) that are disclosed in Schedule 2.2(i) or (iii) that, individually or in the
aggregate, have not had and would not be reasonably likely to have a Material
Adverse Effect.

(j) Absence of Certain Changes. Since December 31, 2007, except as disclosed in
the Publicly Disclosed Information and other than the matters disclosed in
Schedule 2.2(j), (1) the Company and its subsidiaries have conducted their
respective businesses in all material respects in the ordinary course,
consistent with past practice, (2) the Company has not made or declared any
distribution in cash or in kind to its stockholders or issued or repurchased any
shares of its capital stock or other equity interests, and (3) there have not
been any changes, events, conditions or circumstances that, individually or in
the aggregate, have had or would reasonably be expected to have a Material
Adverse Effect.

(k) Absence of Labor Dispute. No labor dispute with the employees of the Company
or any subsidiary exists or, to the knowledge of the Company, is imminent that
would be reasonably likely to have a Material Adverse Effect.

(l) Possession of Intellectual Property. The Company and its subsidiaries own or
possess, or can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know how, trademarks, service marks, trade
names or other intellectual property (collectively, “Intellectual Property”)
necessary to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances that would render any
Intellectual Property invalid or inadequate to protect the interests of the
Company and its subsidiaries therein, and that infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect.

 

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(m) Properties and Leases. Except as set forth in Schedule 2.2(m), the Company
and its subsidiaries do not own any material real property; all of the real
property or material personal property leases and subleases to which the Company
or any of its subsidiaries is a party are valid and effective in accordance with
their respective terms, and there is not, under any such lease or sublease, any
existing default by the Company or such subsidiary or any event which, with
notice or lapse of time or both, would constitute such a default except for such
as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

(n) Environmental Laws. Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, the Company and its
subsidiaries are in compliance with applicable federal, state, local and foreign
laws relating to pollution or protection of human health or the environment or
the release, use, treatment, storage or disposal of pollutants, contaminants,
wastes, toxic substances or hazardous substances.

(o) Compliance with Laws.

(i) Except as set forth in Schedule 2.2(g), since January 1, 2006, the Company
and each of its subsidiaries has complied in all material respects and is not in
default or violation in any respect of any applicable statute, law, ordinance,
license, rule, regulation, order, demand, writ, injunction, decree, or judgment
of any Regulatory Entity, except for failures to comply, defaults or violations
that, individually or in the aggregate, have not had and are not reasonably
expected to have a Material Adverse Effect.

(ii) The Company (w) is in compliance with all applicable provisions of the
Sarbanes-Oxley Act of 2002 and rules of the Commission promulgated thereunder,
as and to the extent the Company is currently required to comply with such Act
and rules thereunder; (x) maintains disclosure controls and procedures required
by Rule 13a-15 or 15d-15 under the Exchange Act, (y) such disclosure controls
and procedures are effective to ensure that all material information concerning
the Company is made known on a timely basis to the individuals responsible for
the preparation of the Company’s filings with the Commission and other public
disclosure documents, and (z) is in compliance with the listing and other rules
of the NYSE applicable to the Company as a listed issuer.

(iii) Neither the Company nor, to the knowledge of the Company, any director,
officer, agent, employee, Affiliate or person acting on behalf of the Company is
currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department.

(iv) The Company has in place policies and procedures reasonably designed to
ensure that its and its subsidiaries’ operations are, and has no reason

 

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to believe said operations are not, being conducted in material compliance with
the financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the USA PATRIOT Act of
2001, all applicable money-laundering and “know your customer” statutes and
rules and regulations and any related or similar rules, regulations or
guidelines issued, administered or enforced by any Regulatory Entity to the
extent applicable to the Company and its subsidiaries (collectively, the
“Money-Laundering Laws”), and, except as disclosed in the Publicly Disclosed
Information, no action, suit or proceeding by or before any court or
governmental agency is pending or to the knowledge of the Company, threatened
against the Company or any of its subsidiaries with respect to Money-Laundering
Laws.

(v) Neither the Company nor any of its subsidiaries, nor, to the knowledge of
the Company, any director, officer, agent, employee or other person acting on
behalf of the Company or any of its subsidiaries, (i) has violated the U.S.
Foreign Corrupt Practices Act of 1977, as amended, or any other similar
applicable foreign, federal or state legal requirement, (ii) has made or
provided, or caused to be made or provided, directly or indirectly, any payment
or thing of value to a foreign official, foreign political party, candidate for
office or any other person knowing that the person will pay or offer to pay the
foreign official, party or candidate, for the purpose of influencing a decision,
inducing an official to violate their lawful duty, securing any improper
advantage, or inducing a foreign official to use their influence to affect a
governmental decision, (iii) has paid, accepted or received any unlawful
contributions, payments, expenditures or gifts, (iv) has violated or operated in
noncompliance in all material respects with any export restrictions, money
laundering law, anti-terrorism law or regulation, anti-boycott regulations or
embargo regulations or (v) is currently subject to any United States sanctions
administered by the Office of Foreign Assets Control of the United States
Treasury Department.

(p) Agreements with Regulatory Entities. Except as set forth in Schedule 2.2(p),
neither the Company nor any of its subsidiaries is subject to any
cease-and-desist or other similar order or enforcement action issued by, or is a
party to any written agreement, consent agreement or memorandum of understanding
with, or is a party to any commitment letter or similar undertaking to, or is
subject to any capital directive by, or since December 31, 2006, has adopted any
board resolutions at the request of, any Regulatory Entity that currently
restricts in any material respect the conduct of its business or that in any
material manner relates to its capital adequacy, its liquidity and funding
policies and practices, its ability to pay dividends, its credit, risk
management or compliance policies, its internal controls, its management or its
operations or business (each item in this sentence, a “Regulatory Agreement”),
nor has the Company or any subsidiary of the Company been advised since
December 31, 2006 by any Regulatory Entity that it is considering issuing,
initiating, ordering, or requesting any such Regulatory

 

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Agreement. The Company and each subsidiary of the Company is in compliance in
all material respects with each Regulatory Agreement to which it is party or
subject, and neither the Company nor any subsidiary of the Company has received
any written notice from any Regulatory Entity indicating that either the Company
or such subsidiary is not in compliance in all material respects with any such
Regulatory Agreement.

(q) Insurance. The Company and its subsidiaries carry or are entitled to the
benefits of insurance in such amounts and covering such risks as are generally
maintained by companies engaged in the same or similar business, and all such
insurance is in full force and effect (provided that the Company makes no
representation or warranty regarding the probability or amount of any insurance
recovery with regard to any of the litigation matters disclosed in Schedule
2.2(g) or in the Publicly Disclosed Information).

(r) Tax Matters.

(i) The Company and each of its subsidiaries have timely filed all material Tax
Returns required to have been filed as of the date hereof (or extensions have
been duly obtained) and have paid all material Taxes required to have been paid
by them through the date hereof, except with respect to matters for which
adequate reserves have been established in accordance with GAAP.

(ii) Except as set forth in Schedule 2.2(r), neither the Company nor any
subsidiary has any material current liability, and the Company has no knowledge
of any events or circumstances that could result in any material liability, for
Taxes of any person (other than the Company and its subsidiaries) (A) under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local
or foreign law) or (B) as a transferee or successor, by contract or otherwise.

(iii) Except as set forth in Schedule 2.2(r), none of the Company or any of its
subsidiaries is a party to, is bound by or has any obligation under any material
Tax sharing or material Tax indemnity agreement or similar contract or
arrangement other than any contract or agreement between or among the Company
and any of its subsidiaries.

(iv) All material Taxes required to be withheld, collected or deposited by or
with respect to the Company and each of its subsidiaries have been timely
withheld, collected or deposited as the case may be and, to the extent required,
have been paid to the relevant taxing authority except with respect to matters
for which adequate reserves have been established in accordance with GAAP.

(v) To the knowledge of the Company, except as set forth in Schedule 2.2(r),
(A) no unsatisfied material deficiencies for any Tax Returns referred to in
clause (i) have been proposed or assessed against or with respect to the Company

 

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or any of its subsidiaries (and there is no outstanding audit, assessment,
dispute or claim concerning any material Tax liability of the Company or any of
its subsidiaries pending or raised) in each case by any taxing authority in
writing to the Company or any of its subsidiaries; (B) no written claim has been
made to the Company by any Regulatory Entity in a jurisdiction where neither the
Company nor any of its subsidiaries files material Tax Returns that it is or may
be subject to taxation by that jurisdiction; and (C) neither the Company nor any
of its subsidiaries has granted any currently effective waiver of any federal,
state, local or foreign statute of limitations period with respect to, or any
extension of such a period for the assessment of, any material Tax that period
has not yet expired.

(vi) There are no material encumbrances or liens with respect to Taxes upon any
of the assets or properties of either the Company or any of its subsidiaries,
other than with respect to Taxes not yet due.

(vii) No closing agreement pursuant to section 7121 of the U.S. Internal Revenue
Code of 1986, as amended (the “Code”) (or any similar provision of state, local
or foreign law) has been entered into by or with respect to the Company or any
of its subsidiaries.

(viii) Neither the Company nor any of its subsidiaries has participated in a
“listed transaction” within the meaning of Treasury Regulation
Section 1.6011-4(b)(2).

(ix) To the knowledge of the Company, the Company is not a passive foreign
investment company (a “PFIC”) within the meaning of Section 1297(a) of the Code
for its current taxable year, and the Company does not expect to become a PFIC
in the foreseeable future.

(x) To the knowledge of the Company, neither the Company nor any non-US
subsidiary of the Company has earned “effectively connected income” within the
meaning of Section 864(c) of the Code.

(xi) To the knowledge of the Company, the Company is not, and, after giving
effect to the transactions contemplated by this Agreement, will not be a
“controlled foreign corporation” within the meaning of Section 957(a) of the
Code.

(xii) “Tax” shall mean any and all federal, state, local and foreign taxes,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise, property and other similar
taxes, together with all interest, penalties and additions imposed with respect
to such amounts whether disputed or not. “Tax Returns” shall mean any return,

 

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report, information return or other document (including any related or
supporting information) filed or required to be filed with any taxing authority
with respect to Taxes. It is agreed and understood that no representation or
warranty is made in respect of Tax matters in any Section of this Agreement
other than this Section 2.2(r)).

(s) Employee Benefits.

(i) Other than as disclosed in the Company’s SEC Filings with respect to any
Company Plan that is an “employee pension benefit plan” (within the meaning of
Section 3(2) of ERISA) subject to Title IV of ERISA, no withdrawal or
termination liability under the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”) or the Code has been incurred that remains unsatisfied and,
to the knowledge of the Company, there exists no condition or circumstances in
connection with which the Company or any of its subsidiaries would reasonably be
expected to be subject to any such liability that is reasonably expected,
individually or in the aggregate, to have a Material Adverse Effect. The Company
Plans have been administered in substantial compliance with applicable statutes,
laws and regulations, including ERISA and the Code, except for any failures to
comply that are not reasonably expected, either individually or in the
aggregate, to have a Material Adverse Effect. The Company and its subsidiaries
are employing all of their employees in compliance with applicable statutes,
laws and regulations regarding employment, except for any failures to comply
that are not reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect.

The term “Company Plan” means any “employee benefit plan” (within the meaning of
Section 3(3) of ERISA) and any stock purchase, stock option, severance,
change-in-control, fringe benefit, bonus, incentive, deferred compensation or
other employee benefit plans, programs or policies, whether or not subject to
ERISA, under which any current or former director, officer, independent
contractor or employee of the Company or any of its subsidiaries has any present
or future right to benefits.

(ii) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not accelerate any
benefits or vesting or trigger any rights under any Company Plan or any
employment, consulting or similar agreement to which the Company or any of its
subsidiaries is a party or is bound.

(t) Brokers and Finders; Other Expenses. Neither the Company nor any of its
subsidiaries nor any of their respective officers, directors, employees or
agents has employed any broker or finder or has incurred, or shall incur, any
liability for any financial advisory, brokerage or finders’ fees or commissions
or any similar charges in connection with this Agreement or the transactions
contemplated hereby, except for fees payable to Lazard Frères & Co. LLC.

 

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(u) Investment Advisor; Investment Company. Neither the Company nor its
subsidiaries conducts activities of an “investment advisor” as such term is
defined in Section (a)(20) of the Investment Company Act of 1940, as amended,
whether or not registered under the Investment Advisors Act of 1940, as amended.
Neither the Company nor its subsidiaries is, and immediately after receipt of
payment for the Purchased Securities will not be required to register as, an
“investment company” within the meaning of the U.S. Investment Company Act of
1940, as amended, and neither the Company nor its subsidiaries sponsors any
person that is such an investment company.

(v) Amendment to the Rights Agreement. Prior to the execution and delivery of
this Agreement, the Company and Computershare Trust Company, N.A. have executed
and delivered the Amendment No. 1 to the Rights Agreement dated May 20, 2008,
attached hereto as Annex H.

2.3 Representations and Warranties of the Investor. The Investor hereby
represents and warrants to the Company that as of the date hereof and as of the
Closing Date:

(a) Organization and Authority. The Investor has been duly organized and is
validly existing in good standing under the laws of the jurisdiction of its
organization, with the requisite power and authority to own its properties and
conduct its business as currently conducted.

(b) Authorization and Enforceability of Transaction Documents.

(i) The Investor has the requisite power and authority to execute and deliver
the Transaction Documents to which it is a party and to carry out its
obligations hereunder and thereunder. The execution, delivery and performance by
the Investor of the Transaction Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary company action on the part of the Investor, and no
further approval or authorization is required on the part of the Investor. The
Transaction Documents to which the Investor is a party are or will be, assuming
the due authorization, execution and delivery by each of the other parties
hereto and thereto, valid and binding obligations of the Investor enforceable
against the Investor in accordance with their respective terms, except as the
same may be limited by Bankruptcy Exceptions.

(ii) The execution, delivery and performance by the Investor of the Transaction
Documents to which it is a party, the consummation of the transactions
contemplated hereby and thereby and compliance by the Investor

 

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with any of the provisions hereof and thereof, will not (A) violate, conflict
with, or result in a breach of any provision of, or constitute a default (or an
event that, with notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the performance required
by, or result in a right of termination or acceleration of, or result in the
creation of, any lien, security interest, charge or encumbrance upon any of the
properties or assets of such Investor under any of the terms, conditions or
provisions of (1) its organizational documents or (2) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which the Investor is a party or by which it may be bound, or to
which the Investor or any of the assets of the Investor may be subject, or
(B) subject to compliance with the statutes and regulations referred to in the
next paragraph, violate any statute, rule or regulation or any judgment, ruling,
order, writ, injunction or decree applicable to the Investor or any of its
assets except, in the case of clauses (A)(2) and (B), for those occurrences
that, individually or in the aggregate, have not had and would not be reasonably
likely to have an Investor Material Adverse Effect. “Investor Material Adverse
Effect” means a material adverse effect on the ability of the Investor to
consummate the Purchase and the other transactions contemplated for it by this
Agreement.

(iii) To the Investor’s knowledge, no notice to, filing with, exemption from or
review by, or authorization, consent or approval of, any Regulatory Entity is
required to be given, made or obtained by the Investor in connection with the
Purchase and the other transactions contemplated for it by the Transaction
Documents, except as set forth on Schedule 2.3(b)(iii).

(c) Ownership. After giving effect to the Purchase, as of the Closing Date, the
Investor will not have beneficial ownership of any issued and outstanding Common
Shares except for the Common Shares issuable upon conversion of the Purchased
Securities. The Investor is not acting in concert with any person (other than
its controlled Affiliates) with respect to making or holding this investment and
does not otherwise have an agreement, arrangement or understanding with any
person (other than its controlled Affiliates and the Company) or otherwise
constitute a “group” with any person for the purpose of acquiring, disposing of
or voting any securities of the Company (within the meaning of Section 13(d) of
the Exchange Act).

(d) Financial Capability. The Investor has or will have available prior to the
Closing funds to make the Purchase on the terms and conditions contemplated by
this Agreement.

(e) Trading. The Investor is aware that the securities laws of the United States
generally prohibit any person who has material non-public information about a
company from, among other things, purchasing or selling securities of such
company on the basis of such information or from communicating such information
to any other person under circumstances in which it is reasonably foreseeable
that such person may purchase or sell such securities.

 

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Article III

COVENANTS

3.1 Reasonable Best Efforts. Subject to the terms and conditions of this
Agreement, each of the parties will use its reasonable best efforts in good
faith to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or desirable, or advisable under applicable
laws, so as to permit consummation of the Purchase as promptly as practicable
and otherwise to enable consummation of the transactions contemplated hereby
subject to the conditions hereof and shall cooperate fully with the other party
to that end, including in relation to cooperating in seeking to obtain the
consents, clearances, approvals and notices (and the expiration of waiting
periods) referred to in Schedule 1.3(c).

3.2 Expenses. Except as provided in Section 5.5 or as may otherwise be provided
in any other Transaction Document, each of the parties hereto will bear and pay
all costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated under the Transaction Documents, including fees and
expenses of its own financial or other consultants, investment bankers,
accountants and counsel.

3.3 Publicity. No public release or announcement concerning the transactions
contemplated hereby shall be issued by either party without the prior consent of
the other party (which consent shall not be unreasonably withheld or delayed),
except as such release or announcement may be required by law or the rules or
regulations of any United States or foreign securities exchange, in which case
the party required to make the release or announcement shall, to the extent
reasonably practicable, allow the other party reasonable time to comment on such
release or announcement in advance of such issuance. The provisions of this
Section 3.3 shall not restrict the ability of a party hereto to summarize or
describe the transactions contemplated by this Agreement, or file a copy of the
Transaction Documents, in or with any registration statement, prospectus or
other offering document or any report required by law, regulation or stock
exchange rule so long as the other party is provided a reasonable opportunity to
comment on such disclosure in advance.

3.4 Sufficiency of Outstanding Common Shares. During the period from the Closing
Date until the date on which all the Purchased Securities are converted into
Common Shares, the Company shall at all times have reserved for issuance, free
of pre-emptive or similar rights, a sufficient number of shares of authorized
and unissued Common Shares to effectuate the conversion of the Purchased
Securities without regard to any limitation on such conversion. Prior to the
Closing, the Company shall, at its

 

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expense, cause the Common Shares issuable upon conversion of the Purchased
Securities to be listed on the NYSE, subject to official notice of issuance, and
shall maintain such listing on the NYSE for as long as the Common Shares remain
listed thereon.

3.5 Withholding of Tax. The Company or its paying agent shall withhold and
backup withhold taxes on all payments on the Purchased Securities (and on the
Common Shares issued on conversion of the Purchased Securities) to the extent
required by law. If, prior to any such payment, the Company receives from the
Investor, a duly executed, valid, accurate and properly completed IRS Form W-9
or an appropriate IRS Form W-8 evidencing the Investor’s entitlement to an
exemption from backup withholding on such payment, and the Company does not know
or have reason to know otherwise, the Company shall, and shall cause its paying
agent to, pay such payment to such entity, free and clear of backup withholding
of United States federal income tax as evidenced by such form.

3.6 Anti-Trust Clearance. Prior to the Closing, the Investor and the Company
will make such filings as may be required in connection with the Purchase and
the conversion of the Purchased Securities pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (“HSR Act”) or as may be required by the
German Federal Cartel Office and the termination or expiration of the applicable
waiting periods required under the HSR Act and by the German Federal Cartel
Office shall have occurred. The Company and the Investor shall cooperate in
making any filings required under the HSR Act or required by the German Federal
Cartel Office.

3.7 Investor Representatives.

(a) The Investor shall have the right to designate up to two individuals to
serve as directors on the Company’s board of directors in accordance with the
Company’s memorandum of association and bye-laws, as and to the extent provided
in this Section 3.7 (any such designee who is appointed or elected and serving
as a director pursuant to this Section 3.7, an “Investor Representative”). At
the Closing (or, if later, promptly following the Company’s annual meeting of
members currently scheduled for July 28, 2008), the Company shall take all
corporate and other actions necessary to increase the size of the Company’s
board of directors by two and to cause two individuals named in Schedule 3.7
that have been designated by the Investor no later than two business days prior
to the Closing Date to be appointed to the Company’s board of directors for an
initial term ending at the Company’s next annual meeting of members (after the
annual meeting currently scheduled for July 28, 2008); provided that, prior to
the Closing, the board of directors has approved the designees as provided in
Section 3.7(b) and each of the designees has delivered to the Company a signed,
undated letter of resignation in the form attached as Annex I.

 

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(b) So long as the Investor is the beneficial owner of any Purchased Securities,
and any Voting Shares issued upon the conversion of Purchased Securities, that
in the aggregate represent at least 10% of the Voting Shares then outstanding
(the “Two Director Amount”), the Company will take all corporate and other
actions necessary to cause two individuals designated by the Investor to be
nominated for election as directors on the Company’s board of directors at each
annual meeting of members of the Company (following the annual meeting of
members scheduled July 28, 2008), and will use its reasonable best efforts to
cause such nominees to be elected at such meeting, in each case for a term that
expires upon the next annual meeting of members or at such earlier time (if any)
such nominee may resign, retire, die or be removed as a director. Alternatively,
so long as the Investor is the beneficial owner of any Purchased Securities, and
any Voting Shares issued upon the conversion of Purchased Securities, that in
the aggregate represent at least 5% but less than 10% of the Voting Shares then
outstanding (the “One Director Amount”), the preceding sentence shall not apply
and instead the Company will take all corporate and other actions necessary to
cause one individual designated by the Investor to be nominated for election as
a director on the Company’s board of directors at each annual meeting of members
of the Company, and will use its reasonable best efforts to cause such nominee
to be elected at such meeting, in each case for a term that expires upon the
next annual meeting of members or at such earlier time (if any) as the nominee
may resign, retire, die or be removed as a director. Notwithstanding the
foregoing, with respect to each individual designated by the Investor to be an
Investor Representative pursuant to either of the two preceding sentences (or
pursuant to Section 3.7(a)), (i) the Company shall have no obligation to cause
such designee to be nominated or elected at any annual meeting (or appointed as
a director) unless, prior to the time when the board of directors nominates
directors for election at such meeting (or makes such appointment), the board of
directors (excluding all Investor Representatives) shall, in its discretion,
have approved the Investor’s designee for such nomination and election (or
appointment) (such approval not to be unreasonably withheld) and (ii) the
designee shall have delivered to the Company a signed, undated letter of
resignation in the form attached as Annex I. It is understood and agreed that
the board of directors may reasonably withhold approval of any such designee
(other than any designee set forth on Schedule 3.7) if the board of directors
(excluding all Investor Representatives) determines, in its discretion, that
such designee (i) does not qualify as an independent director, as defined by the
rules of the NYSE (or other applicable exchange), (ii) does not have experience
and standing in the business community comparable to the experience and standing
of independent directors currently serving on the Company’s board of directors
generally, (iii) is associated with or an Affiliate of a Competitor (iv) is
associated with or an Affiliate of a person or persons (other than the Investor
or any of its Affiliates) seeking or proposing to acquire control of the Company
or a material amount of the securities or assets of the Company or any of its
subsidiaries without the approval of the board of directors (excluding all
Investor Representatives) or (v) if the board of directors (excluding all
Investor Representatives) determines that such designee, if elected or appointed
to the board, would cause the Company to violate applicable law. It is
understood and agreed that the board of directors may reasonably withhold
approval of any designee set forth on Schedule 3.7 only if the board of
directors (excluding all Investor Representatives) determines, in its
discretion,

 

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that such designee (1) is associated with or an Affiliate of a Competitor as a
result of such designee being an employee, director or consultant to such
Competitor, (2) is associated with or an Affiliate of a person or persons (other
than the Investor or any of its Affiliates) seeking or proposing to acquire
control of the Company or a material amount of the securities or assets of the
Company or any of its subsidiaries without the approval of the board of
directors (excluding all Investor Representatives) or (3) if the board of
directors (excluding all Investor Representatives) determines that such
designee, if elected or appointed to the board, would cause the Company to
violate applicable law. In the event that the Company reasonably withholds its
approval of any such designees, it shall notify the Investor of its objections
and the Investor shall have the right to designate a different individual for
nomination and election at such annual meeting, subject to the provisions
regarding board approval and a letter of resignation set forth above.
Notwithstanding the foregoing, each Investor Representative’s term of office as
a director shall terminate, and he or she shall resign from the board of
directors, automatically and without any further action on his or her or the
Company’s part, at any time when (A) (i) in the case of any Investor
Representative appointed or elected as a director pursuant to Section 3.7(a) or
the first sentence of this Section 3.7(b), the Investor ceases to beneficially
own the Two Director Amount (subject to the last sentence of this
Section 3.7(b)) or (ii) in the case of any Investor Representative elected a
director pursuant to the second sentence of this Section 3.7(b), the Investor
ceases to beneficially own the One Director Amount or (B) the board of directors
(excluding all Investor Representatives) makes a determination, in its
discretion, to withdraw its approval of such Investor Representative on any
grounds specified in clause (i) through (v) above; provided that, in the case of
clause (i), such determination shall be based upon a material change in
circumstances that occurs or is discovered after the Investor Representative was
previously approved by the board; and provided, further, that the board may
withdraw its approval of an Investor Representative listed on Schedule 3.7 only
on the grounds specified in clause (1) through (3) above. To give effect to any
such termination or resignation, the Company shall have the right to date and
accept the letter of resignation previously delivered by such Investor
Representative. Solely with regard to clause (A)(i) above, if the Investor
ceases to beneficially own the Two Director Amount, but continues to
beneficially own the One Director Amount, then only one Investor Representative
need resign as provided in clause (A)(i) and the Investor shall in its sole
discretion select which Investor Representative shall remain on the board of
directors and the other Investor Representative shall promptly resign.

(c) The Investor Representatives shall be entitled to serve on committees of the
board of directors in accordance with the governance practices and procedures of
the board of directors (including the discretionary nomination and selection
process) on a basis comparable to that on which other directors serve as
committee members; provided that no more than one Investor Representative shall
be entitled to serve on any committee of the board of directors at any one time
and no Investor Representative shall be entitled to serve as chairman of the
board of directors or any

 

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committee. Any Investor Representative who is not a member of a committee of the
board of directors shall have the right to attend and observe (but not vote at)
each meeting of such committee (and to receive from the Company copies of all
notices, information and other material provided to members of such committee).

(d) If at any time an Investor Representative is removed from the board of
directors of the Company, either by a vote of the members or due to a
determination by the board of directors of the Company under Section 3.7(b)
above, the Investor may designate a different individual to serve as such
Investor Representative and the Company will take all corporate and other
actions necessary to cause the individual designated by the Investor to be
appointed as soon as practicable to the Company’s board of directors for an
initial term ending at the Company’s next annual meeting of members; provided
that the board of directors has approved the designee as provided in
Section 3.7(b) and the nominee has delivered to the Company a signed, undated
letter of resignation in the form attached as Annex I.

(e) In the event an individual designated by the Investor and nominated by the
board of directors for election at any annual meeting as provided above is not
elected by the shareholders at such meeting, then the Investor shall have the
right to designate an individual to attend (without voting right) each meeting
of the board of directors or any committee thereof (and to receive from the
Company copies of all notices, information and other material it provides to the
board of directors and committees thereof) until such time as an Investor
Representative is appointed or elected to the board of directors in lieu of such
nominee that was not elected (or until the Investor is no longer entitled to
have its designee so appointed or elected); provided that the Investor and
individual designated to attend board of director meetings first sign and
deliver to the Company an appropriate confidentiality and trading blackout
agreement, in form and substance reasonably satisfactory to the Company, and
unless the board of directors (excluding all Investor Representatives) at any
time makes a determination, in its discretion, not to approve or withdraw
approval of such individual on any reasonable grounds, which shall include any
grounds in clause (b)(iii), (iv) or (v) above with regard to such designee. In
addition, if Closing occurs before the annual meeting of members currently
scheduled for July 28, 2008, the Investor should have the right to designate two
individuals to attend meetings of the board of directors and committees thereof
as provided in this Section 3.7(e), until such time as two designees are
appointed directors as provided in Section 3.7(e) (or the Investor is no longer
entitled to designate Investor Representatives).

(f) For the avoidance of doubt, if the Investor beneficially owns less than the
Two Director Amount and greater than the One Director Amount, the Investor will
have the right to designate only one Investor Representative and its rights and
the Company’s obligations with respect to the second Investor Representative
under this Section 3.7 shall terminate (but not with regard to any breach that
may occur prior to such time). The Company’s obligations, and the Investor’s
rights, under this Section 3.7 shall

 

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terminate generally upon the first time when the Investor ceases to beneficially
own the One Director Amount, but not with regard to any breach that may occur
prior to such time. The Investor shall not be deemed to beneficially own less
than the One Director Amount or the Two Director Amount solely by reason of any
action of the Company that increases the number of issued and outstanding Voting
Shares after the Closing.

(g) Before designating any individual (other than the persons identified on
Schedule 3.7) to serve as an Investor Representative pursuant to Section 3.7(a),
the Investor shall consult with the Company as to the Company’s views about the
potential designee and give due consideration to the Company’s views.

(h) With regard to each individual designated to serve as an Investor
Representative (or board observer), the Investor and such individual shall
provide such information about the individual and the designation to the
Company, and at such times, as the Company may reasonably request in order to
ensure compliance with applicable securities laws and rules of Regulatory
Entities, and to enable the Company’s board of directors to make the
determinations contemplated in this Section 3.7.

3.8 Directors. So long as any Investor designee serves as an Investor
Representative, the Company agrees to maintain directors’ insurance for such
director in an amount not less than the amount of coverage provided from time to
time for other members of the board of directors. The Company shall indemnify
each such director to the same extent it indemnifies its other directors
pursuant to its organizational documents and applicable law. Each such director
shall be reimbursed for his or her out-of-pocket expenses incurred in connection
with his or her participation as a member of the board of directors, in a manner
consistent with the Company’s policies for reimbursing such expenses of other
members of the board of directors. In addition, each such director, in his or
her capacity as a member of the board of directors, shall be entitled to the
compensation paid to other members of the board of directors, in their capacity
as such, except for compensation paid to the Chairman of the Board or any
director who is an officer or employee of the Company or its subsidiaries and
except for compensation paid in respect of service on a committee or another
special capacity in which such director does not serve.

3.9 Conduct of Business. Prior to the earlier of the Closing Date and the
termination of this Agreement pursuant to Section 5.2 (the “Pre-Closing
Period”), unless the Investor shall otherwise consent (such consent not to be
unreasonably withheld, delayed or conditioned), the Company shall, and shall
cause its subsidiaries to, use commercially reasonable efforts to carry on its
business in the ordinary course of business and use reasonable best efforts to
maintain and preserve its and such subsidiaries’ business (including its
organization, assets, properties, goodwill and insurance coverage) and preserve
its business relationships; provided that nothing in this sentence shall limit
or require any actions that the board of directors of the Company may, in good
faith, determine to be inconsistent with their duties or the Company’s

 

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obligations under applicable law or imposed by any Regulatory Entity. During the
Pre-Closing Period, (i) the Company shall not merge or consolidate into, or
sell, transfer or lease all or substantially all of its property or assets to,
any other party unless the successor, transferee or lessee party, as the case
may be (if not the Company), expressly assumes the due and punctual performance
and observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company, (ii) the Company shall not declare or pay
any dividend or distribution on the Common Stock and (iii) if the Company takes
any action that would require any antidilution adjustment to be made under the
Certificate of Designations as if issued on the date of this Agreement, the
Company shall make appropriate adjustments such that the Investor will receive
the benefit of such transaction as if the Purchased Securities had been
outstanding as of the date of such action.

3.10 Certain Tax Matters.

(a) The Company shall use its reasonable best efforts to operate in a manner
that prevents the Company from constituting a PFIC for any taxable year ending
on or after the Closing Date.

(b) On or prior to the expiry of 60 days after the end of each taxable year of
the Company, the Company shall provide the Investor with a statement that sets
forth a good faith analysis of whether the Company was a CFC or a PFIC for such
taxable year.

(c) If the Company determines that the Company constitutes a PFIC for any
taxable year, the Company shall (i) notify the Investor, and (ii) to the extent
that the Company constitutes a PFIC in a period prior to the conversion of the
Purchased Securities into Common Shares, provide the Investor with a statement
(a “PFIC Annual Information Statement”), certificate or any other information
necessary in order for the Investor to timely and properly (A) make an election
under section 1295 of the Code (a “QEF Election”) with respect to the Company
for such taxable year and (B) comply with the reporting requirements applicable
with respect to such QEF Election. The PFIC Annual Information Statement shall
contain the following information and representations: (I) the first and last
days of the taxable year of the Company to which the PFIC Annual Information
Statement applies (the “PFIC Statement Year”), (II) the Investor’s pro rata
shares of “ordinary earnings” and “net capital gain”, within the meaning of
section 1293 of the Code and the Treasury Regulations issued thereunder, of the
Company for such PFIC Statement Year, (III) the amount of cash and the fair
market value of other property distributed or deemed distributed to the Investor
during such PFIC Statement Year, and (IV) a statement that the Company will
permit the Investor and its representatives to inspect and to copy the Company’s
permanent books of account, records and such other documents as may be
maintained by it for the purpose of establishing that the Company’s ordinary
earnings and net capital gain are computed in accordance with United States
federal income tax principles and verifying these amounts

 

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and the Investor’s pro rata shares thereof. Each PFIC Annual Information
Statement shall be signed by the Company and shall be furnished to the Investor
no later than 60 days following the end of the PFIC Statement Year. For the
avoidance of doubt, the Company is required to provide a PFIC Annual Information
Statement only to the extent provided in this Section 3.10(c), and not under any
other Section (including Section 3.10(d)) of this Agreement.

(d) The Company shall promptly furnish to the Investor any other information
reasonably requested to enable the Investor to comply with any applicable tax
reporting requirements with respect to the acquisition, ownership, or
disposition of, and income attributable to, any Equity Securities held by the
Investor, including, without, limitation, such information as may be reasonably
requested by the Investor to complete United States federal, state or local
income tax returns with respect to the Company’s status as a CFC or a PFIC.

(e) The costs of complying with the requirements of this Section 3.10 shall be
borne by the Company.

3.11 Certain Adjustments. (a) If, from the date hereof until the first
anniversary of the Closing Date the Company issues and sells, or agrees to issue
and sell, in one or more transactions Common Shares (or other securities that
are convertible into or exchangeable or exercisable for, or are otherwise linked
to, Common Shares) (excluding Common Shares or other equity securities and/or
options or other rights in respect thereof to be offered to directors, employees
or consultants of the Company or its direct or indirect subsidiaries pursuant to
employee benefit plans, employment agreements or other customary compensatory
plans or arrangements) at a purchase (or reference, implied, conversion,
exchange or comparable) price (the “New Issuance Price”) per share less than the
Conversion Price (as defined in the Certificate of Designations) (a “Conversion
Reset Issuance”), then on the second business day after the closing of any
Conversion Reset Issuance, the Company shall make a payment to the Investor (the
“Reset Payment”) equal to the product of (i) an amount equal to (x) the
Conversion Price minus the New Issuance Price, divided by (y) the Conversion
Price and (ii) the amount equal to (A) the Price per Series A Share set forth in
Annex A multiplied by (B) the Actual Number grossed up as required to compensate
the Investor for any diminution in value in the Purchased Securities resulting
from such Reset Payment; provided that the Company, in its sole discretion and
as an alternative to making all or any portion of such Reset Payment in cash,
may instead pay the Reset Payment due to the Investor in whole or in part by
delivering to the Investor Common Shares valued at 95% of the Current Market
Price of the Common Shares (as such term is defined in the Certificate of
Designations, with the 10 consecutive trading days referenced in such definition
to end on the last trading day prior to the earlier of the date on which the
Reset Payment occurs or the first date of the announcement of the related
Conversion Reset Issuance), but solely to the extent that any such delivery of
Common Shares would not result in the Company failing to comply with applicable
requirements of the NYSE or

 

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any other Regulatory Entity (provided that, in the event the Company elects to
pay the Reset Payment by delivering Common Shares, the Company shall, in its
sole discretion, have a reasonable period of time in which to seek any
shareholder approval required to satisfy such requirements and the Company’s
obligation to pay the related Reset Payment shall be postponed until such time
as such shareholder approval shall have been obtained or denied).

(b) Any such Reset Payment shall be treated by the parties as an adjustment to
the purchase price for the Purchased Securities.

(c) If, from the date hereof until the first anniversary of the Closing Date
(or, if later, pursuant to any “Securities Demand” provision in respect of any
bank financing incurred in satisfaction of the condition set forth in
Section 1.3(e)(iv)) the Company issues and sells any preference shares with an
annual dividend rate (“New Issuance Dividend Rate”) greater than a rate (the
“Rate Limit”) equal to (i) the annual Quarterly Dividend Rate divided by (y) 1.1
(a “Dividend Reset Issuance”), then the annual Quarterly Dividend Rate shall be
adjusted upward (if necessary) so as to equal 110% of the New Issuance Dividend
Rate, but only with respect to Purchased Securities beneficially owned (and only
while beneficially owned) by the Investor (or any controlled Affiliates of the
Investor), with such adjustment to be effective on the issue date for the
Dividend Reset Issuance, and Quarterly Dividends shall accumulate on such
securities at such adjusted rate from such date for as long as they remain
beneficially owned as aforesaid and issued and outstanding) and shall be payable
if, as and when Quarterly Dividends are payable under the Certificate of
Designations. The Company may pay the incremental amount of any such Quarterly
Dividend resulting from such adjustment, when so payable, in cash or by
delivering Common Shares valued in the manner set forth in Section 3.11(a) with
respect to Reset Payments (with the 10 consecutive trading days referenced
therein to end on the trading day prior to the relevant date of payment and
subject to the shareholder vote provisions of Section 3.11(a)).

Article IV

ADDITIONAL AGREEMENTS

4.1 Standstill Agreement. The Investor agrees that, without the prior written
approval of the Company, neither the Investor nor any of its Affiliates will,
directly or indirectly:

(a) purchase, offer or agree to purchase, or otherwise acquire beneficial
ownership of, any Equity Securities (as hereinafter defined) if, upon
consummation of such purchase or other acquisition, the Investor or its
Affiliates would have beneficial ownership of 20.0% or more of the issued and
outstanding Voting Shares (as hereinafter defined), other than solely as a
consequence of a reduction in the number

 

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of Equity Securities outstanding or as a result of the issuance of any Common
Shares in respect of Purchased Securities due to an adjustment or share payment
provisions in the Certificate of Designations or this Agreement; or

(b) (i) make or in any way participate in any solicitation of proxies to vote,
or seek to advise or influence any person with respect to the voting of, any
Voting Shares of the Company or any of its subsidiaries, (ii) seek or propose to
influence, advise, change or control the management, board of directors,
policies, affairs or strategy of the Company or any of its subsidiaries, in each
case by way of any public communication, or any communication to
securityholders, intended for such purpose (it being understood that this
clause (ii) shall not prohibit the Investor from exercising its rights under
Section 3.7 or any Investor Representative from performing his or her duties as
a director of the Company), (iii) make or encourage others to make a proposal
for any transaction which would result in a Change of Control (as defined below)
or (iv) enter into any agreements or understandings with any person (other than
the Company or any of its subsidiaries) for the purpose of any of the actions
described in clauses (i), (ii) and (iii) above.

(c) The Investor’s obligations under Sections 4.1(a) and 4.1(b) shall terminate
on the earliest of: (i) the third anniversary of the Closing Date; (ii) the date
on which the Investor and its Affiliates beneficially own less than 5% of the
issued and outstanding Voting Shares; (iii) the date on which the Company’s
board of directors (x) publicly recommends that shareholders tender their shares
to any person who has publicly announced or commenced a tender or exchange offer
that, if consummated, would result in a Change of Control, or (y) fails to
recommend that shareholders reject such offer within ten (10) business days
after its public announcement or commencement; (iv) the public announcement by
the Company that it is “for sale” in a transaction, or that it supports a
proposed transaction, that would result in a Change of Control; (v) the
execution by the Company of a definitive agreement that, if consummated, would
result in a Change of Control, (vi) the public announcement by or on behalf of
any person (other than Investor and its Affiliates) or “group”, as such term is
defined in Section 13(d)(3) of the Exchange Act (other than any group that
includes Investor or any of its Affiliates) of the commencement of a bona fide
proxy or consent solicitation to elect or remove a majority of the board of
directors of the Company that is not, within ten (10) days after the
announcement of such proxy or consent solicitation, publicly opposed by the
Company’s board of directors and that would, if successful, result in a Change
of Control; or (vii) failure of any individual who is duly designated by the
Investor to serve as an Investor Representative to be elected and maintained as
a director as provided in Section 3.7 (other than any such failure due to the
failure of such individual to comply with the requirements included in
Section 3.7); (each of the events in clauses (i) – (vii) above, a “Standstill
Termination Event”).

A “Change of Control” shall be deemed to have occurred (i) if any person (other
than the Investor and its Affiliates) shall acquire beneficial ownership of more
than 50% of the Voting Shares issued and outstanding, (ii) upon consummation of
a merger or

 

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consolidation of the Company into or with another person (other than the
Investor and its Affiliates) in which the shareholders of the Company
immediately prior to the consummation of such transaction shall own less than
50% of the voting securities of the surviving person (or the parent of the
surviving person where the surviving person is wholly owned by the parent
person) immediately following the consummation of such transaction, (iii) upon
the consummation of the sale, transfer or lease (but not including a transfer or
lease by pledge or mortgage to a bona fide lender) of all or substantially all
of the assets of the Company to another person other than a subsidiary of the
Company or (iv) upon the adoption of a plan of liquidation or dissolution of the
Company.

(d) As used herein, “Equity Securities” means, at any time, all Voting Shares,
Series A Shares and other securities of any person convertible into, or
exchangeable or exercisable for, Voting Shares, in each case then issued and
outstanding. “Voting Shares” means, at any time, all Common Shares, Series A
Shares and other voting shares (if any) of the Company, in each case then issued
and outstanding. As used herein, “beneficial ownership”, “beneficially own” and
correlative terms have the meaning set forth in Rule 13d-3 and Rule 13d-5 under
the Exchange Act and, for the avoidance of doubt, it is understood and agreed
that the following shall apply for the purpose of calculating the beneficial
ownership of Voting Shares of any person for any purpose hereunder: (i) any
Equity Security (including any Series A Shares) that is convertible into, or
exchangeable or exercisable for, any Voting Shares and is beneficially owned by
such person or any of its Affiliates shall be treated as fully converted,
exchanged or exercised, as the case may be, into or for the underlying Voting
Shares (regardless of when or on what conditions such conversion, exchange or
exercise may occur), (ii) Equity Securities that are beneficially owned by such
person and each of its Affiliates, or by any member of a group of which such
person or any of its Affiliates is a member pursuant to said Rule 13d-5, shall
be aggregated as if beneficially owned by such person and (iii) any Equity
Security that is convertible into, or exchangeable or exercisable for, Voting
Shares and is beneficially owned by any person other than such person or any of
its Affiliates shall not be taken into account. Notwithstanding the foregoing,
solely for the purpose of calculating the Two Director Amount and the One
Director Amount in Section 3.7, beneficial ownership of the Investor shall mean
the beneficial ownership of the Investor and any controlled Affiliate of the
Investor but shall not include beneficial ownership of any Affiliate that is not
a controlled Affiliate of the Investor or any member of a group that is not the
Investor or any such controlled Affiliate of the Investor.

4.2 Lock-Up. From the date of this Agreement and for a period ending on the
close of business on the second full NYSE trading day following the filing by
the Company of its annual report on Form 10-K for the fiscal year ended
March 31, 2008 (the “Lock-Up Period”), the Investor and its Affiliates will not,
directly or indirectly, (a) purchase or otherwise acquire beneficial ownership
of, or sell, assign, transfer, convey, pledge, hypothecate or otherwise encumber
or dispose of any interest in, any Equity Securities (or engage in any Hedging
Transaction (as hereinafter defined)) or (b)

 

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offer, agree or publicly announce any intention to do any of the foregoing (it
being understood and agreed that the foregoing restrictions are expressly
intended to preclude the Investor and its Affiliates from directly or indirectly
engaging in any transaction that is designed to, or reasonably can be expected
to lead to or result in, any of the foregoing during the Lock-Up Period, even if
it involves an acquisition or disposition of securities by any person other than
the Investor and its Affiliates). For purposes of this Agreement, “Hedging
Transaction” means any short sale (whether or not against the box) or any
purchase, sale, acquisition or grant of any right (including any put or call
option or pursuant to any swap or similar arrangement) with respect to any
Equity Securities or any other securities (other than a broad-based market index
published by an independent third party) that relate to or derive any
significant part of their value from any Equity Securities.

4.3 Transfer Restrictions.

(a) Restrictions on Transfer. Except as specified in Section 4.3(b), the
Investor shall not, directly or indirectly, sell, assign, transfer, convey,
pledge, hypothecate or otherwise encumber or dispose of any interest in, or
engage in a Hedging Transaction or offer, agree or publicly announce any
intention to do any of the foregoing with respect to (collectively, “Transfer”),
any of the Purchased Securities or Voting Shares issued or issuable upon
conversion of the Purchased Securities, in each case without the Company’s prior
written approval.

(b) Permitted Transfers. The Investor shall be permitted:

(i) to Transfer any Purchased Securities (or Voting Shares issued or issuable
upon conversion of the Purchased Securities) at any time following the earlier
of (x) any Standstill Termination Event and (y) the date that is one year after
the Closing Date, but then only (A) in a privately negotiated transaction to a
person who represents that it (1) is not a Competitor (as defined below) (other
than a Permitted Financial Intermediary), (2) is not seeking and does not
propose to acquire control of the Company and (3) together with its Affiliates
does not beneficially own prior to such Transfer, and will not in such Transfer
acquire beneficial ownership of, 5.0% or more of the issued and outstanding
Voting Shares or (B) in a registered public offering, pursuant to Rule 144 under
the Securities Act or otherwise in the public market unless, in the case of this
clause (B), the Investor has directed that the Transfer be made (directly or
indirectly) to the account of a person who the Investor knows is a Competitor
(other than a Permitted Financial Intermediary), is seeking or proposing to make
an acquisition of the kind described in clause (A)(2) above or (together with
its Affiliates) beneficially owns prior to such Transfer or in such Transfer is
acquiring beneficial ownership, of 5.0% or more of the issued and outstanding
Voting Shares; or

 

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(ii) to Transfer any Purchased Securities (or Voting Shares issued or issuable
upon conversion of the Purchased Securities) at any time to any of its
controlled Affiliates (a “Permitted Transferee”) but only if, prior to the
Transfer, the Permitted Transferee agrees in writing for the benefit of the
Company (in the form attached hereto as Annex J) to be bound by the provisions
of this Article IV (and Article V in so far as relevant thereto) with respect to
the Transferred securities; provided that the Permitted Transferee shall be
permitted to own such Transferred securities (or Voting Shares issued or
issuable upon conversion of the Transferred securities) only so long as such
Permitted Transferee shall be a controlled Affiliate of the Investor and upon
ceasing to be such shall transfer such security pursuant to this clause (ii);
provided further that no such Transfer shall relieve the Investor of its
obligations under this Agreement.

At least 5 days prior to the Transfer of any Purchased Securities (or Voting
Shares issued or issuable upon conversion of the Purchased Securities), the
Investor shall deliver a written notice (the “Transfer Notice”) to the Company
specifying (a) the number of Purchased Securities (or such Voting Shares) the
Investor wishes to Transfer, (b) if known, the identity of the transferee and
(c) the proposed timing and method of such transfer and the proposed purchase
price. No Transfer shall be effected pursuant to this Section 4.3 unless and
until the Company has had a reasonable opportunity to review the proposed terms
of the Transfer and has received from the Investor and/or transferee such
evidence and other assurances that the proposed Transfer would comply with this
Agreement (and the Registration Agreement) as the Company may reasonably
request. Other than pursuant to Transfers to Permitted Transferees, the rights
of the Investor under this Agreement (including Section 3.7) are not assignable
to and will not be assumed by the transferee upon any Transfer of the Purchased
Securities.

As used herein, “Competitor” shall mean, at any time, any person (x) who is
identified on Schedule 4.3(b), (y) who is not identified on Schedule 4.3(b) but
who in any fiscal year ending after the date hereof (but not in any fiscal year
ended prior to the date hereof) derived more than 25% of such person’s aggregate
revenues from the business of providing brokerage, execution or clearing
services to third parties with respect to any of the following:
(1) exchange-listed futures and options, (2) cash equities and bonds,
(3) non-exchange listed derivatives relating to equities, fixed income or
commodities, including contract-for-difference and spread trading or (4) foreign
exchange or (z) who is not identified on Schedule 4.3(b) but who in any fiscal
year ending after the date hereof (but not in any fiscal year ended prior to the
date hereof) derived revenues from the business described in clauses (y)(1) and
(3) in an amount equal to more than 50% of the aggregate revenues of the Company
in its most recent fiscal year ended prior to such time.

As used herein, “Permitted Financial Intermediary” shall mean any financial
intermediary who acquires the Transferred securities (or an interest therein)
with a view to distribution, trading or hedging such securities in the ordinary
course of its business.

 

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4.4 Purchase for Investment. The Investor acknowledges and agrees that the
Purchased Securities have not been registered under the Securities Act or under
any state or foreign securities laws and are being issued solely to the Investor
in reliance upon an exemption from registration under the Securities Act
pursuant to Section 4(2) thereof. The Investor (i) is acquiring the Purchased
Securities solely for investment with no present intention to distribute any of
the Purchased Securities to any person in violation of the Securities Act or any
other applicable securities laws, (ii) will not Transfer any of the Purchased
Securities or Voting Shares issued or issuable upon conversion of the Purchased
Securities except in compliance with the registration requirements or exemption
provisions of the Securities Act and any other applicable securities laws and
with Section 12 of the Registration Agreement, (iii) 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 the Purchase and of
making an informed investment decision, (iv) is able to bear the economic risk
of the Purchase and at the present time is able to afford a complete loss of
such investment and (v) is an “accredited investor” as such term is defined in
Rule 501 of Regulation D of the U.S. Securities Act of 1933.

4.5 Legend. The Investor agrees that all certificates or other instruments
representing Purchased Securities (or Voting Shares issued or issuable upon
conversion of the Purchased Securities) will bear a legend substantially to the
following effect:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE (AND THOSE ISSUABLE ON CONVERSION
THEREOF) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY U.S. STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS
IN EFFECT UNDER SUCH ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT, AND IN ACCORDANCE WITH ALL APPLICABLE U.S., STATE AND OTHER SECURITIES
LAWS. THIS CERTIFICATE IS ISSUED PURSUANT TO AND IS SUBJECT TO THE RESTRICTIONS
ON TRANSFER AND OTHER PROVISIONS OF AN INVESTMENT AGREEMENT AND A REGISTRATION
RIGHTS AGREEMENT, EACH DATED AS OF [•], 2008 BETWEEN THE ISSUER OF THESE
SECURITIES AND THE INVESTOR REFERRED TO THEREIN, COPIES OF WHICH ARE ON FILE
WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED EXCEPT IN

 

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COMPLIANCE WITH SAID AGREEMENTS, AND ANY SALE OR OTHER TRANSFER NOT IN
COMPLIANCE WITH SAID AGREEMENTS WILL BE VOID.

As and when provided in Section 11 of the Registration Agreement, the Company
shall issue new certificates or other instruments representing Purchased
Securities (or Voting Shares issued or issuable upon conversion of the Purchased
Securities) that do not contain a legend restricting transfer.

4.6 Indemnity.

(a) The Company agrees to indemnify and hold harmless each of the Investor and
its Affiliates and each of their respective officers, directors, partners,
employees and agents, and each person who controls the Investor within the
meaning of the Exchange Act and the regulations thereunder, to the fullest
extent lawful, from and against any and all actions, suits, claims, proceedings,
costs, losses, liabilities, damages, expenses (including reasonable attorneys’
fees and disbursements) (collectively, “Losses”) arising out of or resulting
from (1) any inaccuracy in or breach of the Company’s representations or
warranties in this Agreement or (2) the Company’s breach of agreements or
covenants made by the Company in this Agreement.

(b) The Investor agrees to indemnify and hold harmless each of the Company and
its Affiliates and each of their respective officers, directors, partners,
employees and agents, and each person who controls the Company within the
meaning of the Exchange Act and the regulations thereunder, to the fullest
extent lawful, from and against any and all Losses arising out of or resulting
from (1) any inaccuracy in or breach of the Investor’s representations or
warranties in this Agreement or (2) Investor’s breach of agreements or covenants
made by the Investor in this Agreement.

(c) A party entitled to indemnification hereunder (each, an “Indemnified Party”)
shall give written notice to the party indemnifying it (the “Indemnifying
Party”) of any claim with respect to which it seeks indemnification within 10
business days after the discovery by such Indemnified Party of any matters
giving rise to a claim for indemnification; provided that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 4.6 unless and to the
extent that the Indemnifying Party shall have been actually prejudiced by the
failure of such Indemnified Party to so notify such party. Such notice shall
describe in reasonable detail such claim. The Indemnifying Party shall be
entitled to assume, conduct and control, through counsel of its own choosing and
at its own expense, the settlement or defense of any such action, suit, claim or
proceeding brought against an Indemnified Party. Once the Indemnifying Party has
duly assumed the defense of any such action, suit, claim or proceeding brought
against an Indemnified Party, the Indemnified Party shall be entitled to
participate in the defense thereof and to employ counsel separate from the
counsel employed by the Indemnifying Party. The

 

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Indemnified Party’s participation in any such defense shall be at its own
expense unless the Indemnifying Party and the Indemnified Party are both named
parties to the proceedings and the Indemnifying Party and the Indemnified Party
shall have mutually concluded in good faith that representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them or the availability to the Indemnified Party of one or
more defenses or counterclaims that are inconsistent with one or more of those
that may be available to the Indemnifying Party in respect thereof. If the
Indemnifying Party assumes the defense of any claim, all Indemnified Parties
shall thereafter deliver to the Indemnifying Party copies of all notices and
documents (including court papers) received by the Indemnified Party relating to
the claim, and each Indemnified Party shall cooperate in the defense or
prosecution of such claim. Such cooperation shall include the retention and
(upon the Indemnifying Party’s request) the provision to the Indemnifying Party
of records and information that are reasonably relevant to such claim, and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Whether or not
the Indemnifying Party shall have assumed the defense of any action, suit, claim
or proceeding brought against an Indemnified Party, the Indemnifying Party shall
not be liable for any settlement or compromise of any action, suit, claim or
proceeding effected without its written consent; provided, however, that the
Indemnifying Party shall not unreasonably withhold, delay or condition its
consent. The Indemnifying Party further agrees that it will not, without the
Indemnified Party’s prior written consent (not to be unreasonably withheld,
conditioned or delayed), settle or compromise any claim or consent to entry of
any judgment in respect thereof in any pending or threatened action, suit, claim
or proceeding in respect of which indemnification has been sought hereunder;
provided, however, that the consent of the Indemnified Party shall not be
required for any settlement or compromise that includes an unconditional release
of such Indemnified Party from all liability arising out of such action, suit,
claim or proceeding.

(d) For purposes of the indemnity contained in Section 4.6(a)(1) and
Section 4.6(b)(1), all qualifications and limitations set forth in the parties’
representations and warranties (other than Section 2.2(j)) as to “materiality”
or “Material Adverse Effect”, shall be disregarded in determining whether there
shall have been any inaccuracy in or breach of any representations and
warranties in this Agreement.

(e) The Company shall not be required to indemnify the Indemnified Parties
pursuant to Section 4.6(a)(1), (1) with respect to any claim for indemnification
if the amount of Losses with respect to such claim (including a series of
related claims) are less than $250,000 (any claim involving Losses less than
such amount being referred to as a “De Minimis Claim”) and (2) unless and until
the aggregate amount of all Losses incurred with respect to all claims (other
than De Minimis Claims) pursuant to Section 4.6(a)(1) exceed 1.0% of the
purchase price for the Purchased Securities (the “Threshold Amount “), in which
event the Company shall be responsible for only the

 

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amount of such Losses in excess of the Threshold Amount. The Investor shall not
be required to indemnify the Indemnified Parties pursuant to Section 4.6(b)(1),
(A) with respect to any De Minimis Claim and (B) unless and until the aggregate
amount of all Losses incurred with respect to all claims (other than De Minimis
Claims) pursuant to Section 4.6(b)(1) exceed the Threshold Amount, in which
event Purchaser shall be responsible for only the amount of such Losses in
excess of the Threshold Amount. The cumulative indemnification obligation of
(1) the Company to the Investor and all of the Indemnified Parties affiliated
with (or whose claims are permitted by virtue of their relationship with) the
Investor or (2) the Investor to the Company and the Indemnified Parties
affiliated with (or whose claims are permitted by virtue of their relationship
with the) Company, in each case for inaccuracies in or breaches of
representations and warranties, shall in no event exceed 60% of the purchase
price for the Purchased Securities.

(f) Any claim for indemnification pursuant to this Section 4.6 for breach of any
representation or warranty (other than the representations and warranties set
forth in Sections 2.2(c), 2.2(d) and 2.2(r)) can only be brought on or prior to
the second anniversary of the Closing Date; provided that if notice of a claim
for indemnification pursuant to this Section 4.6 for breach of any such
representation or warranty is brought prior to the end of such period, then the
obligation to indemnify in respect of such breach shall survive as to such
claim, until such claim has been finally resolved.

(g) The indemnity provided for in this Section 4.6 shall be the sole and
exclusive monetary remedy of Indemnified Parties after the Closing for any
inaccuracy of any representation or warranty or any other breach of any covenant
or agreement contained in this Agreement; provided that nothing herein shall
limit in any way any such party’s remedies in respect of fraud by any other
party in connection with the transactions contemplated hereby. No party to this
Agreement (or any of its Affiliates) shall, in any event, be liable or otherwise
responsible to any other party (or any of its Affiliates) for any consequential
or punitive damages of such other party (or any of its Affiliates) arising out
of or relating to this Agreement or the performance or breach hereof.

(h) No investigation of the Company by the Investor, or by the Company of the
Investor, whether prior to or after the date hereof shall limit any Indemnified
Party’s exercise of any right hereunder or be deemed to be a waiver of any such
right.

Article V

MISCELLANEOUS

5.1 Survival. The representations and warranties of the Company contained in
Section 2.2 shall survive the Closing until the date two years after the

 

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Closing Date, at which time such representations and warranties shall expire;
provided, however, that the representations and warranties made in Sections
2.2(c), 2.2(d) and 2.2(r) shall survive until the expiration of the applicable
statute of limitations (60 days after the expiration of such statute of
limitations in the case of 2.2(r)). The representations and warranties of the
Investor contained in Section 2.3 shall survive the Closing until the date two
years after the Closing Date, at which time such representations and warranties
shall expire; provided, however, that the representations and warranties made in
Section 2.3(b) and 2.3(e) shall survive the Closing until the expiration of the
applicable statute of limitations. All other provisions of this Agreement shall
survive the Closing until the expiration of the applicable statute of
limitations.

5.2 Termination. This Agreement may be terminated at any time prior to the
Closing:

(a) by either the Investor or the Company if the Closing shall not have occurred
by the 120th calendar day following the date of this Agreement; provided,
however, that in the event the Closing has not occurred by such 120th calendar
day, the parties will consult in good faith to determine whether to extend the
term of this Agreement, it being understood that the parties shall be required
to consult only until the fifth day after such 120th calendar day and not be
under any obligation to extend the term of this Agreement; provided, further,
that the right to terminate this Agreement under this Section 5.2(a) shall not
be available to any party whose breach of any representation or warranty or
failure to perform any obligation under this Agreement shall have caused or
resulted in the failure of the Closing to occur on or prior to such date;

(b) by either the Investor or the Company in the event that any Regulatory
Entity shall have issued an order, decree or ruling or taken any other action,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall have become final
and nonappealable; or

(c) by the mutual written consent of the Investor and the Company.

(d) by the Company, in the event that the Company delivers to the Investor a
commitment letter for a debt financing intended to satisfy the condition in
clause (1) of Section 1.3(e)(iv) that the Company is, in good faith, prepared to
execute, and, within 5 business days the Investor delivers a written notice to
the Company stating that the debt financing described in such commitment letter
will not meet the conditions required in clause (1) of Section 1.3(e)(iv),
provided, however, that in such case the Company shall make any payments to the
Investor as would be required by Section 5.5 had the Closing occurred.

In the event of termination of this Agreement as provided in this Section 5.2,
this Agreement shall forthwith become void and there shall be no liability on
the part of either party hereto, except that nothing herein shall relieve either
party from liability for any breach of this Agreement prior to termination.

 

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5.3 Amendment. No amendment or waiver of any provision of this Agreement will be
effective unless made in writing and signed by a duly authorized representative
of each party.

5.4 Waiver of Conditions. The conditions to each party’s obligation to
consummate the Purchase are for the sole benefit of such party and may be waived
by such party, in whole or in part, to the extent permitted by applicable law.
No such waiver will be effective unless it is in a writing signed by a duly
authorized representative of the waiving party that makes express reference to
the provision or provisions subject to such waiver.

5.5 Expenses. Upon the Closing or the termination of this Agreement under 5.2(a)
(unless the Investor has breached this Agreement) or 5.2(d), the Company shall
reimburse the Investor on demand for reasonable documented out-of-pocket fees
and expenses, including the fees and expenses of attorneys, accountants and
consultants employed by it, in connection with the transactions contemplated
hereby, submitted to the Company at least two business days prior to the Closing
Date; provided that such reimbursement pursuant to this Section 5.5 shall not
exceed the amount set forth in Schedule 5.5.

5.6 Counterparts and Facsimile. For the convenience of the parties hereto, this
Agreement may be executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts
will together constitute the same agreement. Executed signature pages to this
Agreement may be delivered by facsimile and such facsimiles will be deemed as
sufficient as if actual signature pages had been delivered.

5.7 GOVERNING LAW; SUBMISSION TO JURISDICTION, ETC. THE TRANSACTION DOCUMENTS
WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE (PROVIDED THAT THE CERTIFICATE OF DESIGNATIONS AND MATTERS RELATING TO THE
COMPANY’S MEMORANDUM OF ASSOCIATION AND BYE-LAWS WILL BE GOVERNED BY THE LAWS OF
BERMUDA). IN CONNECTION WITH ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR
RELATING TO THE TRANSACTION DOCUMENTS, OR THE VALIDITY, INTERPRETATION, BREACH
OR TERMINATION OF ANY TRANSACTION DOCUMENTS, INCLUDING CLAIMS SEEKING REDRESS OR
ASSERTING RIGHTS UNDER ANY LAW, EACH OF THE PARTIES HERETO AGREES (A) TO SUBMIT
TO THE PERSONAL JURISDICTION OF THE STATE OR FEDERAL COURTS IN

 

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THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK, (B) THAT EXCLUSIVE JURISDICTION
AND VENUE SHALL LIE IN SUCH STATE OR FEDERAL COURTS IN THE BOROUGH OF MANHATTAN
AND EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY SUCH COURT THAT SUCH DISPUTE, CONTROVERSY OR CLAIM BROUGHT IN SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND (C) THAT NOTICE MAY BE
SERVED UPON SUCH PARTY AT THE ADDRESS AND IN THE MANNER SET FORTH FOR SUCH PARTY
IN SECTION 5.9.

5.8 Remedies. In addition and supplementary to other rights and remedies
existing in a party’s favor under this Agreement, such party may apply to a
court of law or equity of competent jurisdiction for specific performance and/or
injunctive or other equitable relief in order to enforce or prevent any breach
or violation of any provision of this Agreement. All such rights and remedies
shall, to the extent permitted by applicable law, be cumulative and the
existence, assertion, pursuit or exercise of any thereof by such party shall not
preclude such party from exercising or pursuing any other rights or remedies
available to it.

5.9 Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other will be in writing and will be deemed to
have been duly given (a) on the date of delivery if delivered personally, or by
facsimile or e-mail, upon confirmation of receipt, or (b) on the second business
day following the date of dispatch if delivered by a recognized next day courier
service. All notices hereunder shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the party
to receive such notice.

 

(A)   If to the Investor:

  J.C. Flowers II L.P.   c/o J.C. Flowers & Co. LLC   717 5th Avenue, 26th Floor
  New York, New York 10022 Attention:   Facsimile:   E-mail:  

 

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with a copy to:

  Debevoise & Plimpton LLP   New York, NY 10022 Attention:   Gregory V. Gooding,
Esq. Facsimile:   (212) 521-7870 E-mail:   ggooding@debevoise.com  

(B)   If to the Company:

    MF Global Ltd.   717 Fifth Ave., 9th Floor   New York, New York 10022
Attention:   General Counsel Facsimile:   (212) 589-6236 E-mail:  
hschneider@mfglobal.com

with a copy to:

  Sullivan & Cromwell LLP   125 Broad Street   New York, New York 10004
Attention:   David B. Harms Facsimile:   (212) 558-3588 E-mail:  
harmsd@sullcrom.com

5.10 Entire Agreement, Etc. This Agreement (including the Annexes), the other
Transaction Documents and the confidentiality agreement previously entered into
between the Company and the Investor (or its Affiliate) in connection with the
transactions contemplated herein constitute the entire agreement, and supersede
all other prior agreements, understandings, representations and warranties, both
written and oral, between the parties, with respect to the subject matter
hereof. This Agreement will not be assignable by any party without the prior
written consent of the other party (any attempted assignment in contravention
hereof being null and void); provided, however, that rights but not the
obligations under this Agreement may be assigned by the Investor

 

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to any controlled Affiliate of the Investor upon written notice to the Company.
The Investor agrees to treat all confidential information provided by the
Company in connection with the transactions contemplated by the Transaction
Documents as confidential information subject to the confidentiality provisions
of the previously signed confidentiality agreement referenced above.

5.11 Definitions of “subsidiary” and “Affiliate”. (a) When a reference is made
in this Agreement to a subsidiary of a person, the term “subsidiary” means those
corporations, associations and other entities of which such person owns or
controls more than 50% of the outstanding equity securities either directly or
through entities as to each of which more than 50% of the outstanding equity
securities is owned directly or indirectly by its parent.

(b) The term “Affiliate” means, with respect to any other person, any person
directly or indirectly controlling, controlled by or under common control with,
such person. For purposes of this definition, “control” when used with respect
to any person means the possession, directly or indirectly, of the power to
cause the direction of management and/or policies of such person, whether
through the ownership of voting securities by contract or otherwise. References
to any controlled Affiliate of the Investor shall mean a controlled Affiliate of
J.C. Flowers & Co. LLC and shall include any investment fund or partnership the
managing member or general partner of which is J.C. Flowers & Co. LLC or a
subsidiary of J.C. Flowers & Co. LLC.

5.12 Severability. If any provision of this Agreement or a Transaction Document,
or the application thereof to any person or circumstance, is determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic and legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.

5.13 No Third-Party Beneficiaries. Nothing contained in this Agreement,
expressed or implied, is intended to confer upon any person or entity other than
the Company and the Investor any benefits, rights or remedies.

*        *        *

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officers of the parties hereto as of the date first herein above
written.

 

MF GLOBAL LTD. By:  

/s/ Kevin R. Davis

  Name: Kevin R. Davis   Title: Chief Executive Officer

Signature Page to Investment Agreement

(Company)

--------------------------------------------------------------------------------

J.C. FLOWERS II L.P. By:   JCF Associates II L.P., its General Partner By:   JCF
Associates II Ltd., its General Partner By:  

/s/ David Schamis

  Name: David Schamis   Title:   Authorized Person

Signature Page to Investment Agreement

(Investor)