Exhibit 10.1

 

EXECUTION VERSION

 

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Nomura Global Financial Products Inc.

c/o Nomura Securities International, Inc.
Worldwide Plaza
309 West 49th Street
5th Floor
New York, NY 10019

 

 

March 4, 2014

To:

Cowen Group, Inc.

 

599 Lexington Avenue

 

21st Floor

 

New York, NY 10022

 

Facsimile No.:

(212) 845-7999; (212) 201-4840

 

Attention:

Stephen Lasota, Chief Financial Officer

 

Telephone No.:

(212) 845-7917

 

 

Re:

Call Option Transaction

 

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the call option transaction entered into between Nomura
Global Financial Products Inc. (“Nomura”) and Cowen Group, Inc. (“Counterparty”)
as of the Trade Date specified below (the “Transaction”).  This letter agreement
constitutes a “Confirmation” as referred to in the ISDA Master Agreement
specified below.  This Confirmation shall replace any previous agreements and
serve as the final documentation for the Transaction.

 

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”), as published by the International Swaps
and Derivatives Association, Inc. (“ISDA”) are incorporated into this
Confirmation.  In the event of any inconsistency between the Equity Definitions
and this Confirmation, this Confirmation shall govern.  Certain defined terms
used herein are based on terms that are defined in the Offering Memorandum dated
March 4, 2014 (the “Offering Memorandum”) relating to the 3.00% Cash Convertible
Senior Notes due 2019 (as originally issued by Counterparty, the “Convertible
Notes” and each USD 1,000 principal amount of Convertible Notes, a “Convertible
Note”) issued by Counterparty in an aggregate initial principal amount of USD
130,000,000 (as increased by up to an aggregate principal amount of USD
19,500,000 if and to the extent that the Initial Purchasers (as defined herein)
exercise their option to purchase additional Convertible Notes pursuant to the
Purchase Agreement (as defined herein)) pursuant to an Indenture to be dated
March 10, 2014 (the “Indenture”).  In the event of any inconsistency between the
terms defined in the Offering Memorandum, the Indenture and this Confirmation,
this Confirmation shall govern.  The parties acknowledge that this Confirmation
is entered into on the date hereof with the understanding that (i) definitions
set forth in the Indenture which are also defined herein by reference to the
Indenture and (ii) sections of the Indenture that are referred to herein will
conform to the descriptions thereof in the Offering Memorandum.  If any such
definitions in the Indenture or any such sections of the Indenture differ from
the descriptions thereof in the Offering Memorandum, the descriptions thereof in
the Offering Memorandum will govern for purposes of this Confirmation.  The
parties further acknowledge that the Indenture section numbers used herein are
based on the draft of the Indenture last reviewed by Nomura as of the date of
this Confirmation, and if any such section numbers are changed in the Indenture
as executed, the parties will amend this Confirmation in good faith to preserve
the intent of the parties.  Subject to the foregoing, references to the
Indenture herein are references to the Indenture as in effect on the date of its
execution, and if the Indenture is amended or supplemented following such date
(other than any amendment or supplement (x) pursuant to Section 10.01(h) of the
Indenture that, as determined by the Calculation Agent, conforms the Indenture
to the description of Convertible Notes in the Offering Memorandum or
(y) pursuant to Section 14.07 of the Indenture, subject, in the case of this
clause (y), to the second paragraph under “Method of Adjustment” in Section 3),
any such amendment will be disregarded for purposes of this Confirmation unless
the parties agree otherwise in writing.

 

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Each party is hereby advised, and each such party acknowledges, that the other
party has engaged in, or refrained from engaging in, substantial financial
transactions and has taken other material actions in reliance upon the parties’
entry into the Transaction to which this Confirmation relates on the terms and
conditions set forth below.

 

1.                                      This Confirmation evidences a complete
and binding agreement between Nomura and Counterparty as to the terms of the
Transaction to which this Confirmation relates.  This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the
2002 ISDA Master Agreement (the “Agreement”) as if Nomura and Counterparty had
executed an agreement in such form (but without any Schedule except for the
election of the laws of the State of New York as the governing law (without
reference to choice of law doctrine)) on the Trade Date.  In the event of any
inconsistency between provisions of the Agreement and this Confirmation, this
Confirmation will prevail for the purpose of the Transaction to which this
Confirmation relates.  The parties hereby agree that no transaction other than
the Transaction to which this Confirmation relates shall be governed by the
Agreement.

 

2.                                      The terms of the particular Transaction
to which this Confirmation relates are as follows:

 

General Terms.

 

 

 

 

 

Trade Date:

 

March 4, 2014

 

 

 

Effective Date:

 

The third Exchange Business Day immediately prior to the Premium Payment Date

 

 

 

Option Style:

 

“Modified American”, as described under “Procedures for Exercise” below

 

 

 

Option Type:

 

Call

 

 

 

Buyer:

 

Counterparty

 

 

 

Seller:

 

Nomura

 

 

 

Shares:

 

The Class A Common Stock of Counterparty, par value USD 0.01 per share (Exchange
symbol “COWN”).

 

 

 

Number of Options:

 

130,000. For the avoidance of doubt, the Number of Options shall be reduced by
any Options exercised by Counterparty. In no event will the Number of Options be
less than zero.

 

 

 

Option Entitlement:

 

187.6173.

 

 

 

Strike Price:

 

USD 5.33

 

 

 

Premium:

 

USD 31,052,408.93

 

 

 

Premium Payment Date:

 

The Closing Date

 

 

 

Closing Date:

 

March 10, 2014

 

 

 

Exchange:

 

The NASDAQ Global Select Market

 

 

 

Related Exchange(s):

 

All Exchanges

 

 

 

Excluded Provisions:

 

Section 14.03 and Section 14.04(g) of the Indenture.

 

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Procedures for Exercise.

 

 

 

 

 

Conversion Date:

 

With respect to any conversion of a Convertible Note, the date on which the
Holder (as such term is defined in the Indenture) of such Convertible Note
satisfies all of the requirements for conversion thereof as set forth in
Section 14.02(b) of the Indenture; provided that in no event shall a Conversion
Date be deemed to occur hereunder (and no Option shall be exercised or deemed to
be exercised hereunder) with respect to any Convertible Note surrendered for
conversion in respect of which Counterparty has elected to designate (and such
designation is accepted) a financial institution for exchange in lieu of
conversion of such Convertible Note pursuant to Section 14.12 of the Indenture
(regardless of whether such financial institution delivers any amounts due in
respect of such Convertible Note).

 

 

 

Free Convertibility Date:

 

September 15, 2018

 

 

 

Expiration Time:

 

The Valuation Time

 

 

 

Expiration Date:

 

March 15, 2019, subject to earlier exercise.

 

 

 

Multiple Exercise:

 

Applicable, as described under “Automatic Exercise” below.

 

 

 

Automatic Exercise:

 

Notwithstanding Section 3.4 of the Equity Definitions, and subject to
Section 9(g)(ii), on each Conversion Date in respect of which a Notice of
Conversion that is effective as to Counterparty has been delivered by the
relevant converting Holder, a number of Options equal to the number of
Convertible Notes in denominations of USD 1,000 as to which such Conversion Date
has occurred shall be deemed to be automatically exercised; provided that such
Options shall be exercised or deemed exercised only if Counterparty has provided
a Notice of Exercise to Nomura in accordance with “Notice of Exercise” below.

 

 

 

 

 

Notwithstanding the foregoing, in no event shall the number of Options that are
exercised or deemed exercised hereunder exceed the Number of Options.

 

 

 

Notice of Exercise:

 

Notwithstanding anything to the contrary in the Equity Definitions or under
“Automatic Exercise” above, in order to exercise any Options, Counterparty must
notify Nomura in writing before 5:00 p.m. (New York City time) on the Scheduled
Valid Day immediately preceding the scheduled first day of the Settlement
Averaging Period for the Options being exercised of (i) the number of such
Options and (ii) the scheduled first day of the Settlement Averaging Period and
the scheduled Settlement Date; provided that in respect of Options relating to
Convertible Notes with a Conversion Date occurring on or after the Free
Convertibility Date, such notice may be given on or prior to the second
Scheduled

 

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Valid Day immediately preceding the Expiration Date and need only specify the
number of such Options.

 

 

 

Valuation Time:

 

At the close of trading of the regular trading session on the Exchange; provided
that if the principal trading session is extended, the Calculation Agent shall
determine the Valuation Time in its reasonable discretion.

 

 

 

Market Disruption Event:

 

Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by
the following:

 

 

 

 

 

“‘Market Disruption Event’ means, in respect of a Share, (i) a failure by the
primary United States national or regional securities exchange or market on
which the Shares are listed or admitted for trading to open for trading during
its regular trading session or (ii) the occurrence or existence prior to
1:00 p.m. (New York City time) on any Scheduled Valid Day for the Shares for
more than one half-hour period in the aggregate during regular trading hours of
any suspension or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by the relevant stock exchange or otherwise) in the
Shares or in any options contracts or futures contracts relating to the Shares.”

 

 

 

Settlement Terms.

 

 

 

 

 

Settlement Method:

 

Cash Settlement

 

 

 

Cash Settlement:

 

In lieu of Section 8.1 of the Equity Definitions, Nomura will pay to
Counterparty, on the relevant Settlement Date, the Option Cash Settlement Amount
in respect of any Option exercised or deemed exercised hereunder. In no event
will the Option Cash Settlement Amount be less than zero.

 

 

 

Option Cash Settlement Amount:

 

In respect of any Option exercised or deemed exercised, an amount in cash equal
to (A) the sum of the products, for each Valid Day during the Settlement
Averaging Period for such Option, of (x) the Option Entitlement on such Valid
Day multiplied by (y) the Relevant Price on such Valid Day less the Strike
Price, divided by (B) the number of Valid Days in the Settlement Averaging
Period; provided that if the calculation contained in clause (y) above results
in a negative number, such number shall be replaced with the number “zero”.

 

 

 

Valid Day:

 

A day on which (i) there is no Market Disruption Event and (ii) trading in the
Shares generally occurs on the Exchange or, if the Shares are not then listed on
the Exchange, on the principal other United States national or regional
securities exchange on which the Shares are then listed or, if the Shares are
not then listed on a United States national or regional securities exchange, on
the principal other market on which the Shares are then listed

 

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or admitted for trading. If the Shares are not so listed or admitted for
trading, “Valid Day” means a Business Day.

 

 

 

Scheduled Valid Day:

 

A day that is scheduled to be a Valid Day on the principal United States
national or regional securities exchange or market on which the Shares are
listed or admitted for trading. If the Shares are not so listed or admitted for
trading, “Scheduled Valid Day” means a Business Day.

 

 

 

Business Day:

 

Any day other than a Saturday, a Sunday or a day on which the Federal Reserve
Bank of New York is authorized or required by law or executive order to close or
be closed.

 

 

 

Relevant Price:

 

On any Valid Day, the per Share volume-weighted average price as displayed under
the heading “Bloomberg VWAP” on Bloomberg page COWN <equity> AQR (or its
equivalent successor if such page is not available) in respect of the period
from the scheduled open of trading until the scheduled close of trading of the
primary trading session on such Valid Day (or if such volume-weighted average
price is unavailable at such time, the market value of one Share on such Valid
Day, as determined by the Calculation Agent using, if practicable, a
volume-weighted average method). The Relevant Price will be determined without
regard to after hours trading or any other trading outside of the regular
trading session trading hours.

 

 

 

Settlement Averaging Period:

 

For any Option:

 

 

 

 

 

(i)                                     if the related Conversion Date occurs
prior to the Free Convertibility Date, the 80 consecutive Valid Days commencing
on, and including, the second Valid Day following such Conversion Date; or

 

 

 

 

 

(ii)                                  if the related Conversion Date occurs on
or following the Free Convertibility Date, the 80 consecutive Valid Days
commencing on, and including, the 82nd Scheduled Valid Day immediately prior to
the Expiration Date.

 

 

 

Settlement Date:

 

For any Option, the date cash is paid under the terms of the Indenture with
respect to the conversion of the Convertible Note related to such Option.

 

 

 

Settlement Currency:

 

USD

 

 

 

3.                                      Additional Terms applicable to the
Transaction.

 

 

 

Adjustments applicable to the Transaction:

 

 

 

 

 

Potential Adjustment Events:

 

Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential
Adjustment Event” means an occurrence of any event or condition, as set forth in
any Dilution Adjustment Provision, that would result in an adjustment under the
Indenture to the “Conversion Rate”

 

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or the composition of a “unit of Reference Property” or to any “Last Reported
Sale Price” , “Daily VWAP,” “Daily Conversion Value” or “Daily Settlement
Amount” (each as defined in the Indenture). For the avoidance of doubt, Nomura
shall not have any delivery or payment obligation hereunder, and no adjustment
shall be made to the terms of the Transaction, on account of (x) any
distribution of cash, property or securities by Counterparty to holders of the
Convertible Notes (upon conversion or otherwise) or (y) any other transaction in
which holders of the Convertible Notes are entitled to participate, in each
case, in lieu of an adjustment under the Indenture of the type referred to in
the immediately preceding sentence (including, without limitation, pursuant to
the fourth sentence of Section 14.04(c) of the Indenture or the last sentence of
Section 14.04(d) of the Indenture).

 

 

 

Method of Adjustment:

 

Calculation Agent Adjustment, which means that, notwithstanding
Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event,
the Calculation Agent shall make a corresponding adjustment to any one or more
of the Strike Price, Number of Options, Option Entitlement and any other
variable relevant to the exercise, settlement or payment for the Transaction.

 

 

 

 

 

Notwithstanding the foregoing and “Consequences of Merger Events/Tender Offers”
below, if the Calculation Agent in good faith disagrees with any adjustment to
the Convertible Notes that involves an exercise of discretion by Counterparty or
its board of directors (including, without limitation, pursuant to Section 14.05
of the Indenture, Section 14.07(a) of the Indenture or any supplemental
indenture entered into thereunder or in connection with any proportional
adjustment or the determination of the fair value of any securities, property,
rights or other assets), then in each such case, the Calculation Agent will
determine the adjustment to be made to any one or more of the Strike Price,
Number of Options, Option Entitlement and any other variable relevant to the
exercise, settlement or payment for the Transaction in a commercially reasonable
manner.

 

 

 

Dilution Adjustment Provisions:

 

Section 14.04(a), (b), (c), (d) and (e) and Section 14.05 of the Indenture.

 

 

 

Extraordinary Events applicable to the Transaction:

 

 

 

Merger Events:

 

Applicable; provided that notwithstanding Section 12.1(b) of the Equity
Definitions, a “Merger Event” means the occurrence of any event or condition set
forth in the definition of “Merger Event” in Section 14.07(a) of the Indenture.

 

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Tender Offers:

 

Applicable; provided that notwithstanding Section 12.1(d) of the Equity
Definitions, a “Tender Offer” means the occurrence of any event or condition set
forth in Section 14.04(e) of the Indenture.

 

 

 

Consequence of Merger Events /
Tender Offers:

 

Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon
the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall
make a corresponding adjustment in respect of any adjustment under the Indenture
to any one or more of the nature of the Shares (in the case of a Merger Event),
Strike Price, Number of Options, Option Entitlement and any other variable
relevant to the exercise, settlement or payment for the Transaction, subject to
the second paragraph under “Method of Adjustment”; provided, however, that such
adjustment shall be made without regard to any adjustment to the Conversion Rate
pursuant to any Excluded Provision; provided further that if, with respect to a
Merger Event or a Tender Offer, (i) the consideration for the Shares includes
(or, at the option of a holder of Shares, may include) shares of an entity or
person that is not a corporation or is not organized under the laws of the
United States, any State thereof or the District of Columbia or (ii) the
Counterparty to the Transaction following such Merger Event or Tender Offer,
will not be a corporation or will not be the Issuer following such Merger Event
or Tender Offer, then Cancellation and Payment (Calculation Agent Determination)
may apply at Nomura’s sole election.

 

 

 

Nationalization, Insolvency or Delisting:

 

Cancellation and Payment (Calculation Agent Determination); provided that, in
addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it
will also constitute a Delisting if the Exchange is located in the United States
and the Shares are not immediately re-listed, re-traded or re-quoted on any of
the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ
Global Market (or their respective successors); if the Shares are immediately
re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The
NASDAQ Global Select Market or The NASDAQ Global Market (or their respective
successors), such exchange or quotation system shall thereafter be deemed to be
the Exchange.

 

 

 

Additional Disruption Events:

 

 

 

 

 

Change in Law:

 

Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is
hereby amended by (i) replacing the word “Shares” with the phrase “Hedge
Positions” in clause (X) thereof and (ii) inserting the parenthetical
“(including, for the avoidance of doubt and without limitation, adoption or
promulgation of new regulations authorized or mandated by existing statute)” at
the end of clause (A) thereof.

 

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Failure to Deliver:

 

Applicable

 

 

 

Hedging Disruption:

 

Applicable; provided that:

 

 

 

 

 

(i)                                     Section 12.9(a)(v) of the Equity
Definitions is hereby amended by (a) inserting the following words at the end of
clause (A) thereof: “in the manner contemplated by the Hedging Party on the
Trade Date” and (b) inserting the following two phrases at the end of such
Section:

 

 

 

 

 

“For the avoidance of doubt, the term “equity price risk” shall be deemed to
include, but shall not be limited to, stock price and volatility risk. And, for
the further avoidance of doubt, any such transactions or assets referred to in
phrases (A) or (B) above must be available on commercially reasonable pricing
terms.”; and

 

 

 

 

 

(ii)                                  Section 12.9(b)(iii) of the Equity
Definitions is hereby amended by inserting in the third line thereof, after the
words “to terminate the Transaction”, the words “or a portion of the Transaction
affected by such Hedging Disruption”.

 

 

 

Increased Cost of Hedging:

 

Applicable

 

 

 

Hedging Party:

 

For all applicable Additional Disruption Events, Nomura.

 

 

 

Determining Party:

 

For all applicable Extraordinary Events, Nomura; provided that all
determinations shall be made in good faith and in a commercially reasonable
manner.

 

 

 

Non-Reliance:

 

Applicable.

 

 

 

Agreements and Acknowledgements

 

 

Regarding Hedging Activities:

 

Applicable

 

 

 

Additional Acknowledgments:

 

Applicable

 

 

 

4.                                      Calculation Agent.

 

Nomura; provided that all calculations shall be made in good faith and in a
commercially reasonable manner.

 

5.                                      Account Details.

 

(a)

Account for payments to Counterparty:

 

 

 

 

Bank:

Capital One Bank

 

Bank Add.:

424 Madison Avenue

 

 

New York, NY 10017

 

ABA#:

065-000-090

 

Acct No.:

7527921710

 

Beneficiary:

Ramius LLC

 

Attn:

Anja Herman, (212) 834-1291

 

Ref:

Call Spread

 

 

 

(b)

Account for payments to Nomura:

 

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Agent Bank Name:

BOA FX TRADING

 

Agent BIC:

BOFAUS3N

 

Account Name:

BANK OF AMERICA NY NGFP

 

Account No/Ref:

6550361610

 

 

6.                                      Offices.

 

 

(a)

The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is
not a Multibranch Party.

 

 

(b)

The Office of Nomura for the Transaction is: Inapplicable, Nomura is not a
Multibranch Party.

 

 

7.                                      Notices.

 

 

(a)

Address for notices or communications to Counterparty:

 

 

 

Cowen Group, Inc.

 

599 Lexington Avenue

 

21st Floor

 

New York, NY 10022

 

Facsimile No.:

(212) 845-7999; (212) 201-4840

 

Attention:

Stephen Lasota, Chief Financial Officer

 

Telephone No.:

(212) 845-7917

 

Email:

stephen.lasota@cowen.com

 

 

 

With a copy to:

 

 

 

Attention:

Owen Littman, General Counsel

 

Telephone No.:

(724) 773-2270

 

Email:

owen.littman@cowen.com

 

 

(b)

Address for notices or communications to Nomura:

 

 

 

Nomura Global Financial Products Inc.

 

c/o Nomura Securities International, Inc.

 

Worldwide Plaza

 

309 West 49th Street

 

5th Floor

 

New York, NY 10019

 

Attention:

Equity Derivatives Operations

 

Telephone No.:

(212) 667-9580

 

Facsimile No.:

(646) 587-8638

 

Email:

EDGUSOps@us.nomura.com

 

 

 

With copies to:

 

 

 

Attention:

Stephen Roti

 

Title:

Managing Director, Head of Equity Structuring/Equity Capital Markets, Americas

 

Telephone No.:

(212) 436-8182

 

Facsimile No.:

(646) 587-9334

 

Email:

stephen.roti@nomura.com

 

 

 

Attention:

Raymond Ko

 

Title:

Executive Director, Head of Corporate Equity Solutions, Americas

 

Telephone No.:

(212) 667-2118

 

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Facsimile No.:

(646) 587-8638

 

Email:

raymond.ko@nomura.com

 

 

 

Attention:

James Chenard

 

Title:

Vice President

 

Telephone No.:

(212) 667-1363

 

Facsimile No.:

(646) 587-8740

 

Email:

james.chenard@nomura.com

 

8.                                      Representations and Warranties of
Counterparty.

 

Each of the representations and warranties of Counterparty set forth in
Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of
March 4, 2014, between Counterparty and Nomura Securities International, Inc.,
as representative of the Initial Purchasers party thereto (the “Initial
Purchasers”), are true and correct and are hereby deemed to be repeated to
Nomura as if set forth herein.  Counterparty hereby further represents and
warrants to Nomura on the date hereof and on and as of the Premium Payment Date
that:

 

(a)                                 Counterparty has all necessary corporate
power and authority to execute, deliver and perform its obligations in respect
of the Transaction; such execution, delivery and performance have been duly
authorized by all necessary corporate action on Counterparty’s part; and this
Confirmation has been duly and validly executed and delivered by Counterparty
and constitutes its valid and binding obligation, enforceable against
Counterparty in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except that
rights to indemnification and contribution hereunder may be limited by federal
or state securities laws or public policy relating thereto.

 

(b)                                 Neither the execution and delivery of this
Confirmation nor the incurrence or performance of obligations of Counterparty
hereunder will conflict with or result in a breach of the certificate of
incorporation or by-laws (or any equivalent documents) of Counterparty, or any
applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any agreement or instrument to
which Counterparty or any of its subsidiaries is a party or by which
Counterparty or any of its subsidiaries is bound or to which Counterparty or any
of its subsidiaries is subject, or constitute a default under, or result in the
creation of any lien under, any such agreement or instrument.

 

(c)                                  No consent, approval, authorization, or
order of, or filing with, any governmental agency or body or any court is
required in connection with the execution, delivery or performance by
Counterparty of this Confirmation, except such as have been obtained or made and
such as may be required under the Securities Act of 1933, as amended (the
“Securities Act”) or state securities laws.

 

(d)                                 Counterparty is not and, after consummation
of the transactions contemplated hereby, will not be required to register as an
“investment company” as such term is defined in the Investment Company Act of
1940, as amended.

 

(e)                                  Counterparty is an “eligible contract
participant” (as such term is defined in Section 1a(18) of the Commodity
Exchange Act, as amended, other than a person that is an eligible contract
participant under Section 1a(18)(C) of the Commodity Exchange Act).

 

(f)                                   Each of it and its affiliates is not, on
the date hereof, in possession of any material non-public information with
respect to Counterparty or the Shares.

 

(g)                                  [Reserved]

 

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(h)                                 Counterparty (A) is capable of evaluating
investment risks independently, both in general and with regard to all
transactions and investment strategies involving a security or securities;
(B) will exercise independent judgment in evaluating the recommendations of any
broker-dealer or its associated persons, unless it has otherwise notified the
broker-dealer in writing; and (C) has total assets of at least $50 million.

 

(i)                                     Counterparty represents and warrants
that it has received, read and understands the OTC Options Risk Disclosure
Statement and a copy of the most recent disclosure pamphlet prepared by The
Options Clearing Corporation entitled “Characteristics and Risks of Standardized
Options,” which is available at
http://www.optionsclearing.com/about/publications/character-risks.jsp.

 

(j)                                    Prior to the Trade Date, Counterparty has
delivered to Nomura a resolution of Counterparty’s board of directors
authorizing the Transaction.

 

9.                                      Other Provisions.

 

(a)                                 Opinion; Incumbency Certificate. 
Counterparty shall deliver to Nomura an incumbency certificate, dated as of the
Closing Date, of Counterparty in customary form. Counterparty shall deliver to
Nomura an opinion of counsel, dated as of the Closing Date, in a form reasonably
satisfactory to Nomura.  Delivery of such incumbency certificate and such
opinion to Nomura shall be a condition precedent for the purpose of
Section 2(a)(iii) of the Agreement with respect to each obligation of Nomura
under Section 2(a)(i) of the Agreement.

 

(b)                                 Repurchase Notices.  Counterparty shall, on
any day on which Counterparty effects any repurchase of Shares, promptly give
Nomura a written notice of such repurchase (a “Repurchase Notice”) on such day
if following such repurchase, the number of outstanding Shares as determined on
such day is (i) less than 112.730 million (in the case of the first such notice)
or (ii) thereafter more than 2.221 million less than the number of Shares
included in the immediately preceding Repurchase Notice.  Counterparty agrees to
indemnify and hold harmless Nomura and its affiliates and their respective
officers, directors, employees, affiliates, advisors, agents and controlling
persons (each, an “Indemnified Person”) from and against any and all losses
(including losses relating to Nomura’s hedging activities as a consequence of
becoming, or of the risk of becoming, a Section 16 “insider”, including without
limitation, any forbearance from hedging activities or cessation of hedging
activities and any losses in connection therewith with respect to the
Transaction), claims, damages, judgments, liabilities and expenses (including
reasonable attorney’s fees), joint or several, which an Indemnified Person may
become subject to, as a result of Counterparty’s failure to provide Nomura with
a Repurchase Notice on the day and in the manner specified in this paragraph,
and to reimburse, within 30 days, upon written request, each of such Indemnified
Persons for any reasonable legal or other expenses incurred in connection with
investigating, preparing for, providing testimony or other evidence in
connection with or defending any of the foregoing.  If any suit, action,
proceeding (including any governmental or regulatory investigation), claim or
demand shall be brought or asserted against the Indemnified Person as a result
of Counterparty’s failure to provide Nomura with a Repurchase Notice in
accordance with this paragraph, such Indemnified Person shall promptly notify
Counterparty in writing, and Counterparty, upon request of the Indemnified
Person, shall retain counsel reasonably satisfactory to the Indemnified Person
to represent the Indemnified Person and any others Counterparty may designate in
such proceeding and shall pay the fees and expenses of such counsel related to
such proceeding.  Counterparty shall not be liable for any settlement of any
proceeding contemplated by this paragraph that is effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and
against any loss or liability by reason of such settlement or judgment. 
Counterparty shall not, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding
contemplated by this paragraph that is in respect of which any Indemnified
Person is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on

 

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claims that are the subject matter of such proceeding on terms reasonably
satisfactory to such Indemnified Person.  If the indemnification provided for in
this paragraph is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
Counterparty hereunder, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities.  The remedies
provided for in this paragraph (b) are not exclusive and shall not limit any
rights or remedies which may otherwise be available to any Indemnified Person at
law or in equity.  The indemnity and contribution agreements contained in this
paragraph shall remain operative and in full force and effect regardless of the
termination of the Transaction.

 

(c)                                  Regulation M.  Counterparty is not on the
Trade Date engaged in a distribution, as such term is used in Regulation M under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any
securities of Counterparty, other than a distribution meeting the requirements
of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. 
Counterparty shall not, until the second Scheduled Trading Day immediately
following the Effective Date, engage in any such distribution.

 

(d)                                 No Manipulation.  Counterparty is not
entering into the Transaction to create actual or apparent trading activity in
the Shares (or any security convertible into or exchangeable for the Shares) or
to raise or depress or otherwise manipulate the price of the Shares (or any
security convertible into or exchangeable for the Shares) or otherwise in
violation of the Exchange Act.

 

(e)                                  Transfer or Assignment.

 

(i)                                     Counterparty shall have the right to
transfer or assign its rights and obligations hereunder with respect to all, but
not less than all, of the Options hereunder (such Options, the “Transfer
Options”); provided that such transfer or assignment shall be subject to
reasonable conditions that Nomura may impose, including but not limited, to the
following conditions:

 

(A)                               With respect to any Transfer Options,
Counterparty shall not be released from its notice and indemnification
obligations pursuant to Section 9(b) or any obligations under Section 9(l) or
9(p) of this Confirmation;

 

(B)                               Any Transfer Options shall only be transferred
or assigned to a third party that is a United States person (as defined in the
Internal Revenue Code of 1986, as amended);

 

(C)                               Such transfer or assignment shall be effected
on terms, including any reasonable undertakings by such third party (including,
but not limited to, an undertaking with respect to compliance with applicable
securities laws in a manner that, in the reasonable judgment of Nomura, will not
expose Nomura to material risks under applicable securities laws) and execution
of any documentation and delivery of legal opinions with respect to securities
laws and other matters by such third party and Counterparty, as are requested
and reasonably satisfactory to Nomura;

 

(D)                               Nomura will not, as a result of such transfer
and assignment, be required to pay the transferee on any payment date an amount
under Section 2(d)(i)(4) of the Agreement greater than an amount that Nomura
would have been required to pay to Counterparty in the absence of such transfer
and assignment;

 

(E)                                An Event of Default, Potential Event of
Default or Termination Event will not occur as a result of such transfer and
assignment;

 

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(F)                               Without limiting the generality of clause (B),
Counterparty shall cause the transferee to make such Payee Tax Representations
and to provide such tax documentation as may be reasonably requested by Nomura
to permit Nomura to determine that results described in clauses (D) and (E) will
not occur upon or after such transfer and assignment; and

 

(G)                             Counterparty shall be responsible for all
reasonable costs and expenses, including reasonable counsel fees, incurred by
Nomura in connection with such transfer or assignment.

 

(ii)                                Nomura may, without Counterparty’s consent,
but upon prior written notice, transfer or assign all or any part of its rights
or obligations under the Transaction (A) to any affiliate of Nomura (1) that has
a rating for its long term, unsecured and unsubordinated indebtedness that is
equal to or better than Nomura’s credit rating at the time of such transfer or
assignment, or (2) whose obligations hereunder will be guaranteed, pursuant to
the terms of a customary guarantee in a form used by Nomura generally for
similar transactions, by Nomura or Nomura Holdings Inc. or (B) to any other
third party with a rating for its long term, unsecured and unsubordinated
indebtedness equal to or better than the lesser of (1) the credit rating of
Nomura at the time of the transfer and (2) A- by Standard and Poor’s Rating
Group, Inc. or its successor (“S&P”), A- by Fitch Ratings Inc. or its successor
(“Fitch”) or A3 by Moody’s Investor Service, Inc. or its successor (“Moody’s”)
or, if any of S&P, Fitch or Moody’s ceases to rate such debt, at least an
equivalent rating or better by a substitute rating agency mutually agreed by
Counterparty and Nomura; provided that (i) under the applicable law effective on
the date of such transfer or assignment, Counterparty will not receive a payment
that is less than the payment Counterparty would have received in the absence of
such transfer or assignment on account of any deduction or withholding under
Section 2(d)(i) of the Agreement and (ii) no Event of Default, Potential Event
of Default or Termination Event will occur as a result of such transfer or
assignment.  If at any time at which (A) the Section 16 Percentage exceeds 4.5%,
(B) the Option Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds
the Applicable Share Limit (if any applies) (any such condition described in
clauses (A), (B) or (C), an “Excess Ownership Position”), Nomura is unable after
using its commercially reasonable efforts to effect a transfer or assignment of
Options to a third party on pricing terms reasonably acceptable to Nomura and
within a time period reasonably acceptable to Nomura such that no Excess
Ownership Position exists, then Nomura may designate any Exchange Business Day
as an Early Termination Date with respect to a portion of the Transaction (the
“Terminated Portion”), such that following such partial termination no Excess
Ownership Position exists.  In the event that Nomura so designates an Early
Termination Date with respect to a portion of the Transaction, a payment shall
be made pursuant to Section 6 of the Agreement as if (1) an Early Termination
Date had been designated in respect of a Transaction having terms identical to
the Transaction and a Number of Options equal to the number of Options
underlying the Terminated Portion, (2) Counterparty were the sole Affected Party
with respect to such partial termination and (3) the Terminated Portion were the
sole Affected Transaction (and, for the avoidance of doubt, the provisions of
Section 9(j) shall apply to any amount that is payable by Nomura to Counterparty
pursuant to this sentence as if Counterparty was not the Affected Party).   The
“Section 16 Percentage” as of any day is the fraction, expressed as a
percentage, as determined by Nomura, (A) the numerator of which is the number of
Shares that Nomura and each person subject to aggregation of Shares with Nomura
under Section 13 or Section 16 of the Exchange Act and rules promulgated
thereunder directly or indirectly beneficially own (as defined under Section 13
or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the
denominator of which is the number of Shares outstanding.  The “Option Equity
Percentage” as of any day is the fraction, expressed as a percentage, (A) the
numerator of which is the sum of (1) the product of the Number of Options and
the Option

 

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Entitlement and (2) the aggregate number of Shares underlying any other call
option transaction sold by Nomura to Counterparty, and (B) the denominator of
which is the number of Shares outstanding.  The “Share Amount” as of any day is
the number of Shares that Nomura and any person whose ownership position would
be aggregated with that of Nomura (Nomura or any such person, a “Nomura Person”)
under any law, rule, regulation, regulatory order or organizational documents or
contracts of Counterparty that are, in each case, applicable to ownership of
Shares (“Applicable Restrictions”), owns, beneficially owns, constructively
owns, controls, holds the power to vote or otherwise meets a relevant definition
of ownership under any Applicable Restriction, as determined by Nomura in its
sole discretion.  The “Applicable Share Limit” means a number of Shares equal to
(A) the minimum number of Shares that could give rise to reporting or
registration obligations or other requirements (including obtaining prior
approval from any person or entity) of a Nomura Person, or could result in an
adverse effect on a Nomura Person, under any Applicable Restriction, as
determined by Nomura in its sole discretion, minus (B) 1% of the number of
Shares outstanding. Nomura will use its commercially reasonable efforts to
promptly so notify Counterparty if the Section 16 Percentage exceeds 4.0%.

 

(iii)                             Notwithstanding any other provision in this
Confirmation to the contrary requiring or allowing Nomura to purchase, sell,
receive or deliver any Shares or other securities, or make or receive any
payment in cash, to or from Counterparty, Nomura may designate any of its
affiliates to purchase, sell, receive or deliver such Shares or other
securities, or to make or receive such payment in cash, and otherwise to perform
Nomura’s obligations in respect of the Transaction and any such designee may
assume such obligations.  Nomura shall be discharged of its obligations to
Counterparty to the extent of any such performance.

 

(f)                                   Ratings Decline.  If at any time the long
term, unsecured and unsubordinated indebtedness of Nomura is rated Below
Investment Grade by at least two of Moody’s, Fitch and S&P (a “Ratings
Downgrade”), then Counterparty may, at any time following the occurrence and
during the continuation of such Ratings Downgrade, provide written notice to
Nomura specifying that it elects for this Section 9(f) to apply (a “Trigger
Notice”).  Upon receipt by Nomura of a Trigger Notice from Counterparty, Nomura
will use its commercially reasonable efforts to transfer or assign the
Transaction to a third party in accordance with Section 9(e)(ii), and if Nomura
is unable to effect such a transfer or assignment on pricing terms reasonably
acceptable to Nomura within a commercially reasonable period of time following
such Trigger Notice, an Additional Termination Event shall occur and, with
respect to such Additional Termination Event, (A) Counterparty shall be deemed
to be the sole Affected Party, (B) the Transaction shall be the sole Affected
Transaction and (C) Nomura shall be the party entitled to designate an Early
Termination Date pursuant to Section 6(b) of the Agreement. “Below Investment
Grade” means (x) with respect to Moody’s, a rating of Ba1 or lower and (y) with
respect to S&P or Fitch, a rating of BB+ or lower.

 

(g)                                  Additional Termination Events.

 

(i)                                     Notwithstanding anything to the contrary
in this Confirmation if an event of default with respect to Counterparty occurs
under the terms of the Convertible Notes as set forth in Section 6.01 of the
Indenture and the obligations thereunder are accelerated, then such acceleration
shall constitute an Additional Termination Event applicable to the Transaction
and, with respect to such Additional Termination Event, (A) Counterparty shall
be deemed to be the sole Affected Party, (B) the Transaction shall be the sole
Affected Transaction and (C) Nomura shall be the party entitled to designate an
Early Termination Date pursuant to Section 6(b) of the Agreement.

 

(ii)                                  Notwithstanding anything to the contrary
in this Confirmation, the receipt by Nomura from Counterparty, within the
applicable time period set forth under “Notice of Exercise” above, of any Notice
of Exercise in respect of Options that relate to Convertible Notes as

 

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to which additional Shares would be added to the Conversion Rate pursuant to
Section 14.03 of the Indenture in connection with a “Make-Whole Fundamental
Change” (as defined in the Indenture) shall constitute an Additional Termination
Event as provided in this Section 9(g)(ii).  Upon receipt of any such Notice of
Exercise, Nomura shall designate an Exchange Business Day following such
Additional Termination Event (which Exchange Business Day shall in no event be
earlier than the related settlement date for such Convertible Notes) as an Early
Termination Date with respect to the portion of this Transaction corresponding
to a number of Options (the “Make-Whole Conversion Options”) equal to the lesser
of (A) the number of such Options specified in such Notice of Exercise and
(B) the Number of Options as of the date Nomura designates such Early
Termination Date and, as of such date, the Number of Options shall be reduced by
the number of Make-Whole Conversion Options.  Any payment hereunder with respect
to such termination shall be calculated pursuant to Section 6 of the Agreement
as if (1) an Early Termination Date had been designated in respect of a
Transaction having terms identical to this Transaction and a Number of Options
equal to the number of Make-Whole Conversion Options, (2) Counterparty were the
sole Affected Party with respect to such Additional Termination Event and
(3) the terminated portion of the Transaction were the sole Affected Transaction
(and, for the avoidance of doubt, in determining the amount payable pursuant to
Section 6 of the Agreement, the Calculation Agent shall not take into account
any adjustments to the Option Entitlement that result from corresponding
adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture).

 

(iii)                             Promptly following any repurchase and
cancellation of Convertible Notes (including, without limitation, any repurchase
and cancellation pursuant to Article 15 of the Indenture in connection with a
“Fundamental Change” (as defined in the Indenture)), Counterparty shall notify
Nomura in writing of such repurchase and cancellation and the number of
Convertible Notes so repurchased and cancelled (any such notice, a “Repurchase
Notice”).  Notwithstanding anything to the contrary in this Confirmation, the
receipt by Nomura from Counterparty of any Repurchase Notice, within the
applicable time period set forth in the preceding sentence, shall constitute an
Additional Termination Event as provided in this Section 9(g)(iii).  Upon
receipt of any such Repurchase Notice, Nomura shall designate an Exchange
Business Day following receipt of such Repurchase Notice as an Early Termination
Date with respect to the portion of this Transaction corresponding to a number
of Options (the “Repurchase Options”) equal to the lesser of (A) the number of
such Convertible Notes specified in such Repurchase Notice and (B) the Number of
Options as of the date Nomura designates such Early Termination Date and, as of
such date, the Number of Options shall be reduced by the number of Repurchase
Options.  Any payment hereunder with respect to such termination shall be
calculated pursuant to Section 6 of the Agreement as if (1) an Early Termination
Date had been designated in respect of a Transaction having terms identical to
this Transaction and a Number of Options equal to the number of Repurchase
Options, (2) Counterparty were the sole Affected Party with respect to such
Additional Termination Event and (3) the terminated portion of the Transaction
were the sole Affected Transaction.

 

(h)                                 Amendments to Equity Definitions.

 

(i)                                     Section 12.6(a)(ii) of the Equity
Definitions is hereby amended by (1) deleting from the fourth line thereof the
word “or” after the word “official” and inserting a comma therefor, and
(2) deleting the semi-colon at the end of subsection (B) thereof and inserting
the following words therefor “or (C) the occurrence of any of the events
specified in Section 5(a)(vii)(1) through (9) of the ISDA Master Agreement with
respect to that Issuer.”

 

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(ii)                                  Section 12.9(b)(i) of the Equity
Definitions is hereby amended by (1) replacing “either party may elect” with
“Nomura may elect” and (2) replacing “notice to the other party” with “notice to
Counterparty” in the first sentence of such section.

 

(i)                                     Setoff.  In addition to and without
limiting any rights of set-off that a party hereto may have as a matter of law,
pursuant to contract or otherwise, upon the occurrence of an Early Termination
Date, Nomura (and only Nomura)  shall have the right to set off any obligation
that it may have to Counterparty under this Confirmation, including without
limitation any obligation to make any payment of cash, against any obligation
Counterparty may have to Nomura under any other agreement between Nomura and
Counterparty (each such contract or agreement, a “Separate Agreement”),
including without limitation any obligation to make a payment of cash or a
delivery of any other property or securities. For this purpose, Nomura shall be
entitled to convert any obligation (or the relevant portion of such obligation)
denominated in one currency into another currency at the rate of exchange at
which it would be able to purchase the relevant amount of such currency, and to
convert any obligation to deliver any non-cash property into an obligation to
deliver cash in an amount calculated by reference to the market value of such
property as of the Early Termination Date, as determined by the Calculation
Agent in its sole discretion; provided that in the case of a set-off of any
obligation to release or deliver assets against any right to receive fungible
assets, such obligation and right shall be set off in kind and; provided further
that in determining the value of any obligation to deliver any securities, the
value at any time of such obligation shall be determined by reference to the
market value of such securities at such time, as determined in good faith by the
Calculation Agent.  If an obligation is unascertained at the time of any such
set-off, the Calculation Agent may in good faith estimate the amount or value of
such obligation, in which case set-off will be effected in respect of that
estimate, and the relevant party shall account to the other party at the time
such obligation or right is ascertained. For the avoidance of doubt and
notwithstanding anything to the contrary provided in this Section 9(i), in the
event of bankruptcy or liquidation of either Counterparty or Nomura neither
party shall have the right to set off any obligation that it may have to the
other party under the Transaction against any obligation such other party may
have to it, whether arising under the Agreement, this Confirmation or any other
agreement between the parties hereto, by operation of law or otherwise.

 

(j)                                    Alternative Calculations and Payment on
Early Termination and on Certain Extraordinary Events.  If (a) an Early
Termination Date (whether as a result of an Event of Default or a Termination
Event) occurs or is designated with respect to the Transaction or (b) the
Transaction is cancelled or terminated upon the occurrence of an Extraordinary
Event (except as a result of (i) a Nationalization, Insolvency or Merger Event
in which the consideration to be paid to holders of Shares consists solely of
cash, (ii) a Merger Event or Tender Offer that is within Counterparty’s control,
or (iii) an Event of Default in which Counterparty is the Defaulting Party or a
Termination Event in which Counterparty is the Affected Party other than an
Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or
(viii) of the Agreement or a Termination Event of the type described in
Section 5(b) of the Agreement, in each case that resulted from an event or
events outside Counterparty’s control), and if Nomura would owe any amount to
Counterparty pursuant to Section 6(d)(ii) of the Agreement or any Cancellation
Amount pursuant to Article 12 of the Equity Definitions (any such amount, a
“Payment Obligation”), then Counterparty may give irrevocable telephonic notice
to Nomura, confirmed in writing within one Scheduled Trading Day, no later than
12:00 p.m. (New York City time) on the Merger Date, Tender Offer Date,
Announcement Date (in the case of a Nationalization, Insolvency or Delisting),
Early Termination Date or date of cancellation, as applicable, of its election
that the Share Termination Alternative (as defined below) shall apply, as long
as Counterparty remakes the representation set forth in Section 8(f) as of the
date of such election; provided that if (i) Counterparty does not elect for the
Share Termination Alternative to apply and (ii) any warrant transaction between
the parties hereto is also terminated or cancelled (in whole or in part), and
Counterparty’s payment obligation in respect of such termination or cancellation
will be settled through the delivery of Share Termination Delivery Units, Nomura
may elect for the Share Termination Alternative to apply.

 

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Share Termination Alternative:

 

If applicable, Nomura shall deliver to Counterparty the Share Termination
Delivery Property on, or within a commercially reasonable period of time after,
the date when the relevant Payment Obligation would otherwise be due pursuant to
Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of
the Agreement, as applicable (the “Share Termination Payment Date”), in
satisfaction of such Payment Obligation in the manner reasonably requested by
Counterparty free of payment.

 

 

 

Share Termination Delivery Property:

 

A number of Share Termination Delivery Units, as calculated by the Calculation
Agent, equal to the Payment Obligation divided by the Share Termination Unit
Price. The Calculation Agent shall adjust the Share Termination Delivery
Property by replacing any fractional portion of a security therein with an
amount of cash equal to the value of such fractional security based on the
values used to calculate the Share Termination Unit Price.

 

 

 

Share Termination Unit Price:

 

The value to Nomura of property contained in one Share Termination Delivery
Unit, as determined by the Calculation Agent in its discretion by commercially
reasonable means and notified by the Calculation Agent to Nomura at the time of
notification of the Payment Obligation. For the avoidance of doubt, the parties
agree that in determining the Share Termination Delivery Unit Price the
Calculation Agent may consider the purchase price paid in connection with the
purchase of Share Termination Delivery Property.

 

 

 

Share Termination Delivery Unit:

 

One Share or, if the Shares have changed into cash or any other property or the
right to receive cash or any other property as the result of a
Nationalization, Insolvency or Merger Event (any such cash or other property,
the “Exchange Property”), a unit consisting of the type and amount of such
Exchange Property received by a holder of one Share (without consideration of
any requirement to pay cash or other consideration in lieu of fractional amounts
of any securities) in such Nationalization, Insolvency or Merger Event, as
determined by the Calculation Agent.

 

 

 

Failure to Deliver:

 

Applicable

 

 

 

Other applicable provisions:

 

If Share Termination Alternative is applicable, the provisions of Sections 9.8,
9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions
set forth opposite the caption “Representation and Agreement” in Section 2 will
be applicable, except that all references in such provisions to
“Physically-settled” shall be read as references to “Share Termination Settled”
and all references to “Shares”

 

17

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shall be read as references to “Share Termination Delivery Units”. “Share
Termination Settled” in relation to the Transaction means that the Share
Termination Alternative is applicable to the Transaction.

 

(k)                                 Waiver of Jury Trial.  Each party waives, to
the fullest extent permitted by applicable law, any right it may have to a trial
by jury in respect of any suit, action or proceeding relating to the
Transaction.  Each party (i) certifies that no representative, agent or attorney
of either party has represented, expressly or otherwise, that such other party
would not, in the event of such a suit, action or proceeding, seek to enforce
the foregoing waiver and (ii) acknowledges that it and the other party have been
induced to enter into the Transaction, as applicable, by, among other things,
the mutual waivers and certifications provided herein.

 

(l)                                     Registration.  Counterparty hereby
agrees that if, in the good faith reasonable judgment of Nomura, the Shares
(“Hedge Shares”) acquired by Nomura for the purpose of hedging its obligations
pursuant to the Transaction cannot be sold in the public market by Nomura
without registration under the Securities Act, Counterparty shall, at its
election, either (i) in order to allow Nomura to sell the Hedge Shares in a
registered offering, make available to Nomura an effective registration
statement under the Securities Act and enter into an agreement, in form and
substance satisfactory to Nomura, substantially in the form of an underwriting
agreement for a registered secondary offering; provided, however, that if
Nomura, in its sole reasonable discretion, is not satisfied with access to due
diligence materials, the results of its due diligence investigation, or the
procedures and documentation for the registered offering referred to above, then
clause (ii) or clause (iii) of this paragraph shall apply at the election of
Counterparty, (ii) in order to allow Nomura to sell the Hedge Shares in a
private placement, enter into a private placement agreement substantially
similar to private placement purchase agreements customary for private
placements of equity securities, in form and substance satisfactory to Nomura
(in which case, the Calculation Agent shall make any adjustments to the terms of
the Transaction that are necessary, in its reasonable judgment, to compensate
Nomura for any discount from the public market price of the Shares incurred on
the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge
Shares from Nomura at the Relevant Price on such Exchange Business Days, and in
the amounts, requested by Nomura.

 

(m)                             Tax Disclosure.  Effective from the date of
commencement of discussions concerning the Transaction, Counterparty and each of
its employees, representatives, or other agents may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the Transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to Counterparty relating to such tax treatment and
tax structure.

 

(n)                                 Right to Extend.  Nomura may postpone or
add, in whole or in part, any Valid Day or Valid Days during the Settlement
Averaging Period or any other date of valuation, payment or delivery by Nomura,
with respect to some or all of the Options hereunder, if Nomura determines, in
its commercially reasonable discretion, that such action is reasonably necessary
or appropriate to preserve Nomura’s hedging or hedge unwind activity hereunder
in light of existing liquidity conditions or to enable Nomura to effect
transactions in Shares in connection with its hedging, hedge unwind or
settlement activity hereunder in a manner that is, and, if Nomura were
Counterparty or an affiliated purchaser of Counterparty, would be, in compliance
with applicable legal, regulatory or self-regulatory requirements, or with
related policies and procedures applicable to Nomura.

 

(o)                                 Securities Contract; Swap Agreement.  The
parties hereto intend for (i) the Transaction to be a “securities contract” and
a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United
States Code) (the “Bankruptcy Code”), and the parties hereto to be entitled to
the protections afforded by, among other Sections, Sections 362(b)(6),
362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code, (ii) a party’s
right to liquidate the Transaction and to exercise

 

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any other remedies upon the occurrence of any Event of Default under the
Agreement with respect to the other party to constitute a “contractual right” as
described in the Bankruptcy Code, and (iii) each payment and delivery of cash,
securities or other property hereunder to constitute a “margin payment” or
“settlement payment” and a “transfer” as defined in the Bankruptcy Code.

 

(p)                                 Notice of Certain Other Events. Counterparty
covenants and agrees that:

 

(i)                                     promptly following the public
announcement of the results of any election by the holders of Shares with
respect to the consideration due upon consummation of any Merger Event,
Counterparty shall give Nomura written notice of (x) the weighted average of the
types and amounts of consideration that holders of Shares have elected to
receive upon consummation of such Merger Event or (y) if no holders of Shares
affirmatively make such an election, the types and amounts of consideration
actually received by holders of Shares (the date of such notification, the
“Consideration Notification Date”); provided that in no event shall the
Consideration Notification Date be later than the date on which such Merger
Event is consummated; and

 

(ii)                                promptly following any adjustment to the
Convertible Notes in connection with any Potential Adjustment Event, Merger
Event or Tender Offer, Counterparty shall give Nomura written notice of the
details of such adjustment.

 

(q)                                 Wall Street Transparency and Accountability
Act.  In connection with Section 739 of the Wall Street Transparency and
Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the
enactment of WSTAA or any regulation under the WSTAA, nor any requirement under
WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either
party’s otherwise applicable rights to terminate, renegotiate, modify, amend or
supplement this Confirmation or the Agreement, as applicable, arising from a
termination event, force majeure, illegality, increased costs, regulatory change
or similar event under this Confirmation, the Equity Definitions incorporated
herein, or the Agreement (including, but not limited to, rights arising from
Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess
Ownership Position, or Illegality (as defined in the Agreement)).

 

(r)                                    Agreements and Acknowledgements Regarding
Hedging. Counterparty understands, acknowledges and agrees that: (A) at any time
on and prior to the Expiration Date, Nomura and its affiliates may buy or sell
Shares or other securities or buy or sell options or futures contracts or enter
into swaps or other derivative securities in order to adjust its hedge position
with respect to the Transaction; (B) Nomura and its affiliates also may be
active in the market for Shares other than in connection with hedging activities
in relation to the Transaction; (C) Nomura shall make its own determination as
to whether, when or in what manner any hedging or market activities in
securities of Issuer shall be conducted and shall do so in a manner that it
deems appropriate to hedge its price and market risk with respect to the
Relevant Prices; and (D) any market activities of Nomura and its affiliates with
respect to Shares may affect the market price and volatility of Shares, as well
as the Relevant Prices, each in a manner that may be adverse to Counterparty.

 

(s)                                   Early Unwind. In the event the sale of the
“Firm Securities” (as defined in the Purchase Agreement) is not consummated with
the Initial Purchasers for any reason, or Counterparty fails to deliver to
Nomura opinions of counsel as required pursuant to Section 9(a), in each case by
5:00 p.m. (New York City time) on the Closing Date, or such later date as agreed
upon by the parties (the Closing Date or such later date, the “Early Unwind
Date”), the Transaction shall automatically terminate (the “Early Unwind”) on
the Early Unwind Date and (i) the Transaction and all of the respective rights
and obligations of Nomura and Counterparty under the Transaction shall be
cancelled and terminated and (ii) each party shall be released and discharged by
the other party from and agrees not to make any claim against the other party
with respect to any obligations or liabilities of the other party arising out of
and to be performed in connection with the Transaction either prior to or after
the Early Unwind Date; provided that Counterparty shall purchase from Nomura on
the Early Unwind Date all Shares purchased by Nomura or one or more

 

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of its affiliates in connection with the Transaction at the then prevailing
market price, as determined by the Calculation Agent.  Each of Nomura and
Counterparty represents and acknowledges to the other that, subject to the
proviso included in this Section 9(s), upon an Early Unwind, all obligations
with respect to the Transaction shall be deemed fully and finally discharged.

 

(t)                                    Conduct Rules. Counterparty acknowledges
and agrees to be bound by the Conduct Rules of the Financial Industry Regulatory
Authority, Inc. applicable to transactions in options, and further agrees not to
violate the position and exercise limits set forth therein.

 

(u)                                 Matters relating to Nomura and the Agent.

 

(i)                                     Nomura is not registered as a broker or
dealer under the Exchange Act.  Nomura Securities International, Inc. (“Agent”)
has acted solely as agent for Nomura and Counterparty to the extent required by
law in connection with the Transaction and has no obligations, by way of
issuance, endorsement, guarantee or otherwise, with respect to the performance
of either party under the Transaction.  The parties agree to proceed solely
against each other, and not against Agent, in seeking enforcement of their
rights and obligations with respect to the Transaction, including their rights
and obligations with respect to payment of funds and delivery of securities.

 

(ii)                                Agent may have been paid a fee by Nomura in
connection with the Transaction.  Further details will be furnished upon written
request.

 

(iii)                             The time of dealing for the Transaction will
be furnished by Agent upon written request.

 

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Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us.

 

Very truly yours,

 

 

 

 

 

Nomura Global Financial Products Inc.

 

 

 

 

 

By:

/s/ Thomas Bailey

 

Authorized Signatory

 

Name: Thomas Bailey

 

Accepted and confirmed
as of the Trade Date:

 

Cowen Group, Inc.

 

 

 

 

 

By:

/s/ Peter A. Cohen

 

Authorized Signatory

 

Name: Peter A. Cohen

 

 

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