JOINDER AND AMENDMENT NO. 1 TO
INVESTMENT AGREEMENT
JOINDER AND AMENDMENT NO. 1 TO INVESTMENT AGREEMENT, dated as of July 7,
2008 (this "Amendment"), among ARROW OFFSHORE, LTD, a Cayman Islands exempted
company ("Arrow Offshore"), ARROW PARTNERS LP, a Delaware limited partnership
("Arrow Partners"), and ARROW MASTERS LP, a Delaware limited partnership ("Arrow
Masters" and collectively with Arrow Offshore and Arrow Partners, the "Original
Purchasers"), and ARROW OPPORTUNITIES I, LLC, a Delaware limited liability
company ("Arrow Opportunities Delaware"), ARROW OPPORTUNITIES I, LTD., a Cayman
Islands exempted company ("Arrow Opportunities Cayman" and collectively with
Arrow Opportunities Delaware and the Original Purchasers, the "Purchasers") and
W.P. STEWART & CO., LTD., a Bermuda exempted Company (the "Company"). Arrow
Opportunities Delaware and Arrow Opportunities Cayman are hereinafter together
referred to as the "Arrow Opportunities Funds" or singly as an "Arrow
Opportunities Fund".
WHEREAS, the Original Purchasers and the Company are parties to that
certain Investment Agreement, dated as of May 20, 2008 (the "Agreement"),
pursuant to which the Original Purchasers and the Company agreed that (i) the
Original Purchasers would make a cash tender offer (the "Offer") for up to
19,902,000 common shares, par value $0.001 per share, of the Company ("Common
Shares") for a purchase price per Common Share equal to $1.60 per share, (ii)
the Company would issue to the Original Purchasers, and the Original Purchasers
would purchase, immediately following the Closing of the Offer, not less than
5,010,00 newly issued Common Shares of the Company, and (iii) immediately
following the Closing of the Offer, if the Original Purchasers shall not have
purchased at least 13,840,000 Common Shares pursuant to the Offer and clause
(ii) above, the Original Purchasers have the option but not the obligation to
purchase up to 2,430,000 newly issued Common Shares of the Company;
WHEREAS, each Arrow Opportunities Fund desires to become a party to the
Agreement with the intention of participating in the Offer and the purchase of
the newly issued Common Shares of the Company;
WHEREAS, the Purchasers desire to extend the date on which the Offer is to
expire and the Closing Date;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby
Purchasers and the Company hereby agree as follows:
1. Capitalized Terms. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Agreement.
2. Joinder. Each Arrow Opportunities Fund hereby joins in and becomes
party to the Agreement as a Purchaser thereunder and agrees to be bound by all
of the terms of the Agreement. The Purchasers shall be jointly and severally
liable for all obligations of the Purchasers under the Agreement.
3. Amendments to Agreement. The Agreement is hereby amended as follows:
(a) Section 2.1(a) of the Agreement is hereby amended so that the
proviso of the fourth sentence thereof is changed to read in its entirety as
follows (with the additional language italicized):
"provided, however, that, without the prior written consent of the
Company, Purchasers shall not (i) decrease the price per share payable
in the Offer, (ii) reduce the maximum number of Common Shares to be
purchased in the Offer, (iii) impose conditions to the Offer in
addition to those set forth in Annex A hereto, (iv) change the form of
consideration payable in the Offer, (v) extend the Offer beyond July
28, 2008 except to provide for "subsequent offering periods," as such
term is defined in, and in accordance with, Rule 14d-11 under the
Exchange Act, or (vi) amend, add to or waive any term or condition of
the Offer in any manner that would be, in any significant respect,
adverse to the Company or the Shareholders."
(b) All references in the Agreement to "Purchasers" shall be deemed a
reference to the Original Purchasers and the Arrow Opportunities Funds.
(c) Section 2.3(a) of the Agreement is hereby amended by deleting the
word "second" from the first sentence thereof and inserting the word "third" in
lieu thereof and by adding the words "on one business day's notice to the
Company" after the word "Purchasers" in the fifth line.
(d) Section 2.3(b) of the Agreement is hereby amended by deleting the
word "second" from the first sentence thereof and inserting the word "third" in
lieu thereof.
(e) Section 6.2 of the Agreement is hereby amended by adding as a lead
in before subsection (a) the following words:
"From the date of this Agreement until the Closing Date:"
4. Extension of Offer. The parties acknowledge and agree that the
expiration date of the Offer will be extended to 5:00 p.m. Eastern Time on July
28, 2008 in connection with the joinder and amendment provided hereby.
5. Representations and Warranties. Each Arrow Opportunities Fund hereby
represents and warrants (i) that Arrow Management is the sole manager of Arrow
Opportunities Delaware and the co-advisor of Arrow Opportunities Cayman, (ii)
that Offshore Advisors is a co-advisor of Arrow Opportunities Cayman, and (iii)
that the representations and warranties set forth in Article V of the Agreement
are otherwise true and correct with respect to each Arrow Opportunities Fund as
of the date hereof.
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6. Miscellaneous. (a) Except as modified hereby, the Agreement remains in
full force and effect and the provisions thereof are hereby ratified and
confirmed and the provisions of "Article VIII General Provisions" shall be
applicable to this Amendment.
(b) All references in the Agreement to "this Agreement", "hereunder",
"hereto" or similar references, and all references in all other documents to the
Agreement shall hereinafter be deemed references to the Agreement as amended
hereby.
(c) This Amendment may be executed in one or more counterparts, all of
which together shall for all purposes constitute one amendment, binding on all
parties hereto, notwithstanding that the parties have not signed the same
counterparts.
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IN WITNESS WHEREOF, Purchasers and the Company have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
Arrow Masters LP Arrow Partners LP
By: Arrow Advisors LLC By: Arrow Advisors LLC
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General Partner General Partner
By: /s/ Alexandre von Furstenberg By: /s/ Alexandre von Furstenberg
----------------------------- -----------------------------
Alexandre von Furstenberg Alexandre von Furstenberg
Co-Managing Member Co-Managing Member
By: /s/ Mal Serure By: /s/ Mal Serure
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Mal Serure Mal Serure
Co-Managing Member Co-Managing Member
Arrow Offshore, Ltd. Arrow Opportunities I, LLC
By: /s/ Mal Serure By: /s/ Alexandre von Furstenberg
----------------------------- -----------------------------
Mal Serure Alexander von Furstenberg
Director Co-Managing Member
By: /s/ Mal Serure
-----------------------------
Mal Serure
Co-Managing Member
Arrow Opportunities I, Ltd.
By: /s/ Mal Serure
-----------------------------
Mal Serure
Director
W.P. Stewart & Co., Ltd.
By: /s/ Susan G. Leber
-----------------------------
Susan G. Leber
Managing Director - Chief Financial Officer
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