Document:

Additionalcapcall

EXHIBIT 10.2

EXECUTION COPY
Nomura Global Financial Products Inc.
c/o Nomura Securities International, Inc.  
Worldwide Plaza
309 West 49th Street
5th Floor 
New York, NY 10019
May 19, 2015
		
	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:     Additional Capped 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 May 13, 2015 (the “Offering Memorandum”) relating to the 105,000 shares of 5.625% Series A Cumulative Perpetual Convertible Preferred Stock (the “Convertible Preferred Shares” and each such share with USD 1,000 liquidation preference, a “Convertible Preferred Share”) issued by Counterparty (as increased by 15,750 shares pursuant to the exercise by the Initial Purchasers (as defined herein) of their option to purchase additional Convertible Preferred Shares pursuant to the Purchase Agreement (as defined herein)), the rights, preferences and privileges of which are set forth in a Certificate of Designation dated May 19, 2015 of the Counterparty (the “Certificate of Designation”).  In the event of any inconsistency between the terms defined in the Offering Memorandum, the Certificate of Designation 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 Certificate of Designation which are also defined herein by reference to the Certificate of Designation and (ii) sections of the Certificate of Designation that are referred to herein will conform to the descriptions thereof in the Offering Memorandum.  If any such definitions in the Certificate of Designation or any such sections of the Certificate of Designation 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 Certificate of Designation section numbers used herein are based on the Certificate of Designation as executed.  Subject to the foregoing, references to the Certificate of Designation herein are references to the Certificate of Designation as in effect on the date of its execution, and if the Certificate of Designation is amended or supplemented following such date (other than any amendment or supplement (x) pursuant to Section 4(g)(ii) of the Certificate of Designation that, as determined by the Calculation Agent, conforms the Certificate of Designation to the description of Convertible Preferred Shares in the Offering Memorandum or (y) pursuant to Section 8 of the Certificate of Designation, 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.
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 (i)  the laws of the State of New York as the governing law (without reference to choice of law doctrine), (ii) Nomura Holdings, Inc. as a Credit Support Provider, and (iii) the Guarantee of Nomura Holdings, Inc. dated May 14, 2015 referencing this transaction as a Credit Support Document) 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. The Transaction shall constitute a Share Option Transaction for purposes of the Equity Definitions.
2.    The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms.
		
	Trade Date:
	May 19, 2015

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

		
	Option Style:
	European, 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:
	15,750.  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:
	152.2476.

		
	Strike Price:
	USD 6.5682

		
	Cap Price:
	USD 8.385

		
	Premium: 
	USD 2,071,125

		
	Premium Payment Date: 
	The Closing Date

		
	Closing Date:
	May 20, 2015

		
	Exchange: 
	The NASDAQ Global Select Market

		
	Related Exchange(s): 
	All Exchanges

		
	Excluded Provisions:
	Section 12 and Section 13(l) of the Certificate of Designation.

Procedures for Exercise.
		
	Expiration Time: 
	The Valuation Time

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	Expiration Date: 
	May 20, 2020

		
	Automatic Exercise: 
	Notwithstanding Section 3.4 of the Equity Definitions, a number of Options equal to the then-current Number of Options shall be deemed to be automatically exercised on the Expiration Date.

For the avoidance of doubt, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of 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 Election:
	Applicable; provided that (i) Section 7.1 of the Equity Definitions shall be amended by (a) replacing the words “Cash Settlement or Physical Settlement” in the first sentence thereof with “Cash Settlement, Net Share Settlement or Combination Settlement” and (b) inserting the words “, and in the case of Combination Settlement, the Specified Dollar Amount that will apply to the Transaction” (x) at the end of the first sentence thereof and (y) immediately following the words “with respect to such Transaction” in the last sentence thereof and (ii) Counterparty may elect Cash Settlement or Combination Settlement only if Counterparty represents to Nomura in writing on the date of such election that (a) Counterparty is not in possession of any material non-public information regarding Counterparty or the Shares, (b) Counterparty is making such election in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws and (c) (x) the assets of Counterparty at their fair valuation exceed the liabilities of Counterparty (including contingent liabilities), (y) the capital of Counterparty is adequate to conduct the business of Counterparty, and (z) Counterparty has the ability to pay 

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its debts and obligations as they mature and does not intend to, and does not believe that it will, incur debt beyond its ability to pay as such debts mature.
		
	Electing Party:
	Counterparty.

		
	Settlement Method Election Date:
	The Expiration Date. 

		
	Default Settlement Method:
	Net Share Settlement.

		
	Specified Dollar Amount:
	In the case of Combination Settlement, an amount in USD, which shall be greater than USD 1,000, as specified by Counterparty to Nomura in writing no later than the Settlement Method Election Date.  

		
	Net Share Settlement:
	If applicable, Nomura will deliver to Counterparty, on the Settlement Date, a number of Shares equal to the Net Share Settlement Amount in respect of any Option exercised or deemed exercised hereunder.  In no event will the Net Share Settlement Amount be less than zero.

		
	Net Share Settlement Amount:
	In respect of any Option exercised or deemed exercised hereunder, a number of Shares equal to the sum of the Daily Net Share Settlement Amounts for each of the 50 consecutive Valid Days during the Settlement Averaging Period.

		
	Daily Net Share Settlement Amount:
	For each of the 50 consecutive Valid Days during the Settlement Averaging Period, a number of Shares equal to the quotient of (i) the Daily Option Value on such Valid Day, divided by (ii) the Relevant Price for such Valid Day.

		
	Daily Option Value:
	For each of the 50 Valid Days in the Settlement Averaging Period, 2% of the product of (i) the Option Entitlement and (ii) the Strike Price Differential on such Valid Day.

		
	Strike Price Differential:
	For each Valid Day in the Settlement Averaging Period, if the Relevant Price on such Valid Day is:

(i)  greater than or equal to the Cap Price, the Cap Price less the Strike Price; 
(ii)  greater than the Strike Price and less than the Cap Price, the Relevant Price on such Valid Day less the Strike Price; or 
(iii)  less than or equal to the Strike Price, USD 0.00. 
		
	Combination Settlement:
	If applicable, Nomura will pay or deliver, as the case may be, to Counterparty, on the Settlement Date, the amount of cash and number of Shares included in the Combination Settlement Amount in respect of any Option exercised or deemed exercised hereunder. In no event will such amount of cash or such number of Shares be less than zero. 

		
	Combination Settlement Amount:
	In respect of any Option exercised or deemed exercised hereunder, an amount of cash equal to the aggregate amount 

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of cash, together with a number of Shares equal to the aggregate number of Shares, included in the Daily Combination Settlement Amounts for each of the 50 consecutive Valid Days during the Settlement Averaging Period.
		
	Daily Combination Settlement Amount:
	For each of the 50 consecutive Valid Days during the Settlement Averaging Period:

(i)  an amount of cash equal to the lesser of (a) the Daily Option Measurement Value and (b) the Daily Option Value on such Valid Day; and
(ii)  (a) if the Daily Option Value on such Valid Day exceeds the Daily Option Measurement Value, a number of Shares equal to (1) the difference between the Daily Option Value on such Valid Day and the Daily Option Measurement Value, divided by (2) the Relevant Price for such Valid Day, and (b) otherwise, zero Shares.
		
	Daily Option Measurement Value:
	(i) The excess of the Specified Dollar Amount over USD 1,000 divided by (ii) 50.

		
	Fractional Shares:
	If Combination Settlement or Net Share Settlement is applicable in respect of any Option exercised or deemed exercised hereunder, notwithstanding anything to the contrary herein, Nomura shall pay cash to Counterparty on the Settlement Date in lieu of delivering any fractional Shares that would otherwise be included in the Combination Settlement Amount or the Net Share Settlement Amount, as the case may be, in each case, valued at the Relevant Price on the last Valid Day of the Settlement Averaging Period.

		
	Cash Settlement:
	If applicable, in lieu of Section 8.1 of the Equity Definitions, Nomura will pay to Counterparty, on the 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 hereunder, an amount in cash equal to the sum of the Daily Option Values for each of the 50 consecutive Valid Days during the Settlement Averaging Period.

		
	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 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 

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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 exercised or deemed exercised hereunder, the 50 consecutive Valid Days commencing on, and including, the third Valid Day immediately following May 20, 2020. 

		
	Settlement Date:
	For any Option exercised or deemed exercised hereunder, the third Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option.

		
	Settlement Currency:
	USD

		
	Other Applicable Provisions: 
	The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-settled” shall be read as references to “Share Settled”.  “Share Settled” in relation to any Option exercised or deemed exercised hereunder means that Net Share Settlement or Combination Settlement is applicable to that Option.

		
	Representation and Agreement:
	Notwithstanding anything to the contrary in the Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that any Shares delivered to Counterparty shall be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the Shares under applicable securities laws.

3.    Additional Terms applicable to the Transaction.
Adjustments applicable to the Transaction:
		
	Potential Adjustment Events:
	Other than for purposes of Section 9(w), 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, 

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that would result in an adjustment under the Certificate of Designation to the “Conversion Rate” 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 Certificate of Designation).  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 Preferred Shares (upon conversion or otherwise) or (y) any other transaction in which holders of the Convertible Preferred Shares are entitled to participate, in each case, in lieu of an adjustment under the Certificate of Designation of the type referred to in the immediately preceding sentence (including, without limitation, pursuant to the fourth sentence of Section 13(c) of the Certificate of Designation or the last sentence of Section 13(d) of the Certificate of Designation). 
		
	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; provided that, if any Potential Adjustment Event occurs during any “Observation Period” (as defined in the Certificate of Designation) but no adjustment was made to any Convertible Preferred Share under the Certificate of Designation because the holder thereof was deemed to be a record owner of the underlying Shares on the related “Conversion Date” (as defined in the Certificate of Designation), then the Calculation Agent shall make an adjustment, as determined by it, to the terms hereof in order to account for such Potential Adjustment Event.

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 Preferred Shares that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant to Section 13(k) of the Certificate of Designation, Section 8 of the Certificate of Designation or any amendment to the Certificate of Designation 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.

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	Dilution Adjustment Provisions:
	Section 13(a), (b), (c), (d), (e) and (k) of the Certificate of Designation.

Extraordinary Events applicable to the Transaction:
		
	Merger Events:
	Applicable; provided that, other than for purposes of “Announcement Event”, “Announcement Date” and Section 9(w) below, notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means any Share Exchange Transaction (as defined in the Certificate of Designation).

		
	Tender Offers:
	Applicable; provided that, other than for purposes of “Announcement Event”, “Announcement Date” and Section 9(w) below, notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 13(e) of the Certificate of Designation.

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 Certificate of Designation 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” (as defined in the Certificate of Designation) 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 organized under the law of the United States or any State thereof, then Cancellation and Payment (Calculation Agent Determination) may apply at Nomura’s sole election; and
provided further that, for the avoidance of doubt, adjustments shall be made pursuant to the provisions set forth above regardless of whether any Merger Event or Tender Offer gives rise to an Early Conversion Date (as defined below).

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	Announcement Event:
	If an Announcement Date occurs in respect of a Merger Event (for the avoidance of doubt, determined without regard to the language in the definition of “Merger Event” following the definition of “Reverse Merger” therein) or Tender Offer or public announcement is made by any entity in respect of any potential acquisition by Counterparty and/or its subsidiaries where the aggregate consideration exceeds 15% of the market capitalization of Counterparty as of the date of such announcement (such occurrence, an “Announcement Event”), then on the earliest to occur of the last Valid Day of the Settlement Averaging Period, an Early Termination Date or any other date of cancellation (the “Announcement Event Adjustment Date”) in respect of the Transaction, the Calculation Agent will determine the economic effect on the Transaction of the relevant event (regardless of whether the Announcement Event actually results in a Merger Event or Tender Offer, and taking into account such factors as the Calculation Agent may determine, including, without limitation, changes in volatility, expected dividends or liquidity relevant to the Shares or the Transaction whether prior to or after the Announcement Event or for any period of time, including, without limitation, the period from the Announcement Event to the relevant Announcement Event Adjustment Date).  If the Calculation Agent determines that such economic effect on the Transaction is material, then on the Announcement Event Adjustment Date, the Calculation Agent may make such adjustment to the Cap Price as the Calculation Agent determines appropriate to account for such economic effect, which adjustment shall be effective immediately prior to the settlement, termination or cancellation of the Transaction, as the case may be; provided that in no event shall the Cap Price be less than the Strike Price.

		
	Announcement Date:
	The definition of “Announcement Date” in Section 12.1 of the Equity Definitions is hereby amended by (i) replacing the words “a firm” with the word “any” in the second and fourth lines thereof, (ii) replacing the word “leads to the” with the words “, if completed, would lead to a” in the third and the fifth lines thereof, (iii) replacing the words “voting shares” with the word “Shares” in the fifth line thereof, and (iv) inserting the words “by any entity” after the word “announcement” in the second and the fourth lines thereof.

		
	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 

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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.

		
	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.

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	(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:    Jolanta Kokoszka, (212) 834-1845
Ref:    Call Spread
Account for delivery of Shares to Counterparty:
To be provided in writing by Counterparty.
		
	(b)
	Account for payments to Nomura:

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 

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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:      James Chenard 
Title:          Executive Director 
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 May 13, 2015, 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.

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	(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]

		
	(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 109.526 million (in the case of the first such notice) or (ii) thereafter more than 1.277 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 

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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 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;

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

		
	(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; 

		
	(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; and

		
	(H)
	Nomura shall have completed its customary on-boarding process with respect to the transferee (including satisfaction of all know-your-customer and anti-money laundering requirements, and other customary account opening processes).

		
	(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%, or (B) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clause (A) or (B), 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 

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16 of the Exchange Act and rules promulgated thereunder) 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)
	Staggered Settlement.  If Net Share Settlement or Combination Settlement applies to an exercise of Options hereunder and, with respect to applicable legal and regulatory requirements, including any requirements relating to Nomura’s hedging activities hereunder, Nomura reasonably determines that it would not be practicable or advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Nomura on the Settlement Date, Nomura may, by notice to Counterparty on or prior to the Settlement Date (the “Nominal Settlement Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”) as follows:

		
	(i)
	in such notice, Nomura will specify to Counterparty the related Staggered Settlement Dates (the first of which will be the Nominal Settlement Date and the last of which will be no later than the twentieth (20th) Exchange Business Day following the Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date; 

		
	(ii)
	the aggregate number of Shares that Nomura will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Nomura would otherwise be required to deliver on the Nominal Settlement Date; and

		
	(iii)
	the provisions in Section 2 hereof relating to Net Share Settlement or Combination Settlement, as the case may be, will apply on each Staggered Settlement Date, except that the Shares otherwise deliverable on the Nominal Settlement Date will be allocated among such Staggered Settlement Dates as specified by Nomura in the notice referred to in clause (i) above.

		
	(g)
	Additional Termination Events.  

		
	(i)
	Counterparty shall notify Nomura in writing of (a) any “Conversion Date” (as defined in the Certificate of Designation), (x) in respect of which a “Notice of Conversion” (within the meaning of the Certificate of Designation) that is effective as to Counterparty has been delivered by the converting holder and (y) that occurs prior to the Expiration Date (an “Early Conversion Date”), and (b) the number of Convertible Preferred Shares so converted, no later than 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately following such Early Conversion Date (any such notice, an “Early Conversion Notice”).  

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Notwithstanding anything to the contrary in this Confirmation, the receipt by Nomura from Counterparty, within the applicable time period set forth in the immediately preceding sentence, of an Early Conversion Notice shall constitute an Additional Termination Event as provided in this Section 9(f)(i).  Upon receipt of any such Early Conversion Notice, Nomura shall designate an Exchange Business Day following such Additional Termination Event as an Early Termination Date with respect to the portion of this Transaction corresponding to a number of Options (the “Early Conversion Options”) equal to the lesser of (A) the number of Convertible Preferred Shares specified in such Early Conversion Notice less the number of “Early Conversion Options” (as defined in the letter agreement re: Base Capped Call Option Transaction, between the parties hereto, dated May 13, 2015 (the “Base Capped Call Option Confirmation”), if any, that relate to such Early Conversion 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 Early 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 Early 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” (as defined in the Certificate of Designation) pursuant to Section 12 of the Certificate of Designation).
		
	(ii)
	Promptly following any repurchase and cancellation of Convertible Preferred Shares, Counterparty shall notify Nomura in writing of such repurchase and cancellation and the number of Convertible Preferred Shares 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)(ii).  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 Preferred Shares specified in such Repurchase Notice less the number of “Repurchase Options” (as defined in the Base Capped Call Option Confirmation), if any, that relate to 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.”

		
	(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.

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	(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 or delivery of Shares or other property or securities, against any obligation Counterparty may have to Nomura under any other agreement between Nomura and Counterparty that does not convey to Nomura rights, or the ability to assert claims, that are senior to the rights and claims of common stockholders in the event of Counterparty’s bankruptcy (each such contract or agreement, a “Separate Agreement”), including without limitation any obligation to make a payment of cash or a delivery of Shares or 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 Shares or other property or securities, the value at any time of such obligation shall be determined by reference to the market value of such Shares or other property or 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. 

		
	(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 Nomura shall satisfy the Payment Obligation by the Share Termination Alternative (as defined below), unless (x) Counterparty gives 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 not apply, and (y) Counterparty remakes the representation set forth in Section 8(f) as of the date of such election, in which case the provisions of Section 12.7 or Section 12.9 of the Equity Definitions, or the provisions of Section 6(d)(ii) of the Agreement, as the case may be, shall apply.  

		
	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 

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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” 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 

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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 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 received by the holders of Shares that affirmatively make such an election 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, 

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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 Preferred Shares 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 “Additional 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 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 

21
    

    

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.

		
	(v)
	Payment by Counterparty.  In the event that, following the payment by Counterparty of the Premium hereunder, (i) an Early Termination Date occurs or is designated with respect to the Transaction as a result of a Termination Event or an Event of Default (other than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Counterparty owes to Nomura an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Nomura, pursuant to Section 12.7 or Section 12.9 of the Equity Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero.

		
	(w)
	Other Adjustments Pursuant to the Equity Definitions.  Upon the occurrence of a Merger Date, the occurrence of a Tender Offer Date, or declaration by Counterparty of the terms of any Potential Adjustment Event, respectively, as such terms are defined in the Equity Definitions (subject to the immediately succeeding sentence), the Calculation Agent may, in its sole discretion, adjust the Cap Price to preserve the fair value of the Options to Nomura; provided that in no event shall the Cap Price be less than the Strike Price.  Notwithstanding anything to the contrary in this Confirmation, solely for the purpose of adjusting the Cap Price pursuant to this section 9(w), the terms “Potential Adjustment Event,” “Merger Event,” and “Tender Offer” shall each have the meanings assigned to such term in the Equity Definitions (provided that Section 11.2(e)(vii) of the Equity Definitions shall be amended by (x) replacing the words “a diluting or concentrative” with “a material” and (y) adding the phrase “or the Options” at the end of such sentence).  

22
    

    

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/ Andrew Munro

	Authorized Signatory

	Name:   Andrew Munro

[Cowen Capped Call Sig Page - Additional]    

    

Accepted and confirmed 
as of the Trade Date:
	
		
	Cowen Group, Inc.

	By:
	/s/ Stephen Lasota

	Authorized Signatory

	Name:   Stephen Lasota

[Cowen Capped Call Sig Page - Additional]exh10_1.htm

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of March 13, 2015, is entered into by and among Boston Therapeutics, Inc., a Delaware corporation (the “Company”), and JDF Capital, Inc. (the “Purchaser”).  The Company and the Purchaser are sometimes referred to herein as a “party” and collectively as the “parties”.

 

W I T N E S S E T H:

 

WHEREAS, the Company and the Purchaser are executing and delivering this Agreement in accordance with and in reliance upon the exemption from securities registration for offers and sales to accredited investors afforded, inter alia, by Rule 506 under Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”), and/or Section 4(a)(2) of the 1933 Act; and

WHEREAS, the Purchaser wishes to purchase the Company’s 10% OID Convertible Promissory Note accruing 10% interest (the “Note”) in the original principal amount of $220,000, subject to and upon the terms and conditions of this Agreement and acceptance of this Agreement by the Company, on the terms and conditions referred to herein.

NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.           AGREEMENT TO PURCHASE; PURCHASE PRICE.

a.           Purchase.

(i)           Subject to the terms and conditions of this Agreement, the Note, and the other documents executed in conjunction with the purchase of the Note (collectively the “Transaction Documents”), the Purchaser hereby agrees to purchase the Note for an aggregate purchase price of $200,000 (the “Purchase Amount”).  The First Advance Amount (as defined herein) shall be funded and issuable upon the signing of this Agreement or at such later date mutually agreed upon the by parties (the “First Closing Date”).  The Second Advance Amount (as defined herein) shall be funded and issuable on the 60th day following the First Closing Date (the “Second Closing Date”); provided, however, if at any time during the period beginning as of the First Closing Date and ending on the trading day immediately preceding the Second Closing Date, the closing price of the Company’s common stock reported by the Company’s Principal Trading Market is less than 50% of the closing price of the Company’s common stock as reported by the Company’s Principal Trading Market on the First Closing Date (as adjusted for combinations, consolidations, subdivisions, stock splits, or other reclassifications) the Purchaser may, in the Purchaser’s sole and absolute discretion, determine not to fund all or any portion of the Second Advance Amount.  The Company will, at all times, reserve a number of shares of Common Stock that shall not be less than 300% of the number of shares of Common Stock sufficient to effect conversion of the Note and all accrued interest thereon.

 

 

1

Purchaser Initial: ______

 

Company Initial: ____   _   

 

  

  

(ii)           The Note referred to herein shall be in the form of Annex I to this Agreement.

(iii)           The purchase of the Note by the Purchaser and the other transactions contemplated hereby are sometimes referred to herein and in the other Transaction Documents as the purchase and sale of the Securities (as defined below), and are referred to collectively as the “Transactions”.

(iv)           The Purchaser shall deliver the First Advance Amount to counsel for the Purchaser, which shall be held in escrow until authorized for release to the Company by written instruction of the Purchaser.  The First Advance Amount shall be promptly returned to the Purchaser if not authorized for release by the Purchaser on the First Closing Date.  Subject to the conditions set forth in Section 1(a)(i) above, the Purchaser shall deliver the Second Advance Amount, at the discretion of the Purchaser, to the Company directly or to counsel for the Purchaser to be held in escrow until authorized for release to the Company by the Purchaser on the Second Closing Date.

b.           Certain Definitions.  As used herein, each of the following terms has the meaning set forth below, unless the context otherwise requires:

“Affiliate” means, with respect to a specific Person referred to in the relevant provision, another Person who or which controls or is controlled by or is under common control with such specified Person.

“Common Stock” means the Company’s common stock, $0.001 par value.

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

“First Advance Amount” means the funding, pursuant to the terms of the Note, of one-half of the principal amount of the Note in the amount of $100,000.

“First Closing Date” means the date of the closing of the issuance of the Note and the funding of the First Advance Amount.

 “Holder” means the Person holding the relevant Securities at the relevant time.

“Last Audited Date” means December 31, 2014.

“Material Adverse Effect” means an event or combination of events, which individually or in the aggregate, would reasonably be expected to (i) adversely affect the legality, validity or enforceability of the Securities or any of the Transaction Documents, (ii) have or result in a material adverse effect on the results of operations, assets, prospects, or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole, (iii) adversely impair the Company’s ability to perform fully on a timely basis its obligations under any of the Transaction Documents or the Transactions contemplated thereby, or (iv) materially and adversely affect the value of the rights granted to the Purchaser in the Transaction Documents.

 “Person” means any living person or any entity, such as, but not necessarily limited to, a corporation, partnership or trust.

 

 

2

Purchaser Initial: ______

 

Company Initial: ____   _   

 

  

  

 

“Principal Trading Market” means the Over the Counter Bulletin Board, the OTCQB, OTC Pink or such other market on which the Common Stock is principally traded at the relevant time.

“Purchase Amount means $200,000.

“Purchaser Control Person” means each director, executive officer, promoter, and such other Persons as may be deemed in control of the Purchaser pursuant to Rule 405 under the 1933 Act or Section 20 of the Exchange Act.

“Registrable Securities” means the Common Stock into which the Note can be converted.

“Second Advance Amount” means the funding, in accordance with the terms of the Note and this Agreement, of the balance of the principal amount of the Note in the amount of $100,000.

“Second Closing Date” means the funding of the Second Advance Amount.

“Securities” means the Note and any shares of Common Stock of the Company that may be issued to the Purchaser in connection with the conversion of the principal amount of the Note and interest accrued thereon and any other agreements between the parties.

“Shares” means the shares of Common Stock representing any or all of the Common Stock underlying the Note.

 “Subsidiary” means any subsidiary of the Company.

“Trading Day” means any day during which the Principal Trading Market shall be open for business.

“Transfer Agent” means, at any time, the transfer agent for the Company’s Common Stock.

“Transaction Documents” means this Purchase Agreement, the Note and includes all ancillary documents referred to in those agreements.

c.           Form of Payment; Delivery of Note.

 

(i)           The Purchaser shall pay the Purchase Amount by delivering immediately available good funds in United States Dollars to the Company in an amount equal to the First Advance Amount on the First Closing Date and, subject to the conditions set forth in Section 1(a)(i) of this Agreement, in an amount equal to the Second Advance Amount on the Second Closing Date.

(ii)           On the First Closing Date, the Company shall deliver the Note, duly executed on behalf of the Company, to the Purchaser.

(iii)           By signing this Agreement, each of the Purchaser and the Company agrees to all of the terms and conditions of the Transaction Documents, all of the provisions of which are incorporated herein by this reference as if set forth in full.

d.           Method of Payment.  Payment of the Purchase Amount shall be made by wire transfer of funds to:

 

 

3

Purchaser Initial: ______

 

Company Initial: ____   _ 

 

 

 

BANK:                               CITIZENS BANK

ADDRESS:                      1188 CENTRE COURT

           NEWTON, MA  02459

ABA#                                011500120

SWIFT CODE:                CTZIUS33

BENEFICIARY:              BOSTON THERAPEUTICS, INC.

                                          1750 ELM STREET, SUITE 103

                                          MANCHESTER, NH  03104

ACCOUNT#:                  131561-803-3

2.           PURCHASER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO

              INFORMATION; INDEPENDENT INVESTIGATION.

 

The Purchaser represents and warrants to, and covenants and agrees with, the Company as follows:

 

a.           Without limiting Purchaser’s right to sell the Securities pursuant to an effective registration statement or otherwise in compliance with the 1933 Act, the Purchaser is purchasing the Securities for its own account for investment only and not with a view towards the public sale or distribution thereof and not with a view to or for sale in connection with any distribution thereof.

b.           The Purchaser is (i) an “accredited investor” as that term is defined in Rule 501 of the General Rules and Regulations under the 1933 Act by reason of Rule 501(a)(3), (ii) experienced in making investments of the kind described in this Agreement and the other Transaction Documents, (iii) able, by reason of the business and financial experience of its officers (if an entity) and professional advisors (who are not affiliated with or compensated in any way by the Company or any of its Affiliates or selling agents), to protect its own interests in connection with the Transactions described in this Agreement, and the related documents, and to evaluate the merits and risks of an investment in the Securities, and (iv) able to afford the entire loss of its investment in the Securities.

 

c.           All subsequent offers and sales of the Securities by the Purchaser shall be made pursuant to registration of the relevant Securities under the 1933 Act or pursuant to an exemption from registration.

d.           The Purchaser understands that the Securities are being offered and sold to it in reliance on specific exemptions from the registration requirements of the 1933 Act and state securities laws and that the Company is relying upon the truth and accuracy of, and the Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Securities.

 

 

4

Purchaser Initial: ______

 

Company Initial: ____   _   

 

  

  

 

e.           The Purchaser and its advisors, if any, have been furnished with or have been given access to all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Purchaser, including those set forth on any annex attached hereto.  The Purchaser and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management and have received complete and satisfactory answers to any such  inquiries.  Without limiting the generality of the foregoing, the Purchaser has also had the opportunity to obtain and to review the Company’s filings on EDGAR (collectively, the “Company’s SEC Documents”).

f.           The Purchaser understands that its investment in the Securities involves a high degree of risk.

g.           The Purchaser hereby represents that, in connection with its purchase of the Securities, it has not relied on any statement or representation by the Company or any of its officers, directors and employees or any of their respective attorneys or agents, except as specifically set forth herein.

h.           The Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities.

i.           This Agreement and the other Transaction Documents to which the Purchaser is a party, and the Transactions contemplated thereby, have been duly and validly authorized, executed and delivered on behalf of the Purchaser and are valid and binding agreements of the Purchaser enforceable in accordance with their respective terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors’ rights generally.

3.           COMPANY REPRESENTATIONS AND WARRANTIES.  The Company represents and warrants to the Purchaser as of the date hereof and as of the First Closing Date and the Second Closing Date.

 

a.           Rights of Others Affecting the Transactions.  There are no preemptive rights of any shareholder of the Company, as such, to acquire the Note or any shares of the Company’s Common Stock that may be issued to the Purchaser in connection with any other agreements between the parties, in the event such shares are issued.

b.           Status.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite corporate power to own its properties and to carry on its business as now being conducted.  The Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have or result in a Material Adverse Effect.  The Company has registered its stock and is obligated to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act, as amended.  The Common Stock is, or immediately following the First Closing Date will be, quoted on the Principal Trading Market.  The Company has received no notice, either oral or written, with respect to the continued eligibility of the Common Stock for such quotation on the Principal Trading Market, and the Company has maintained all requirements on its part for the continuation of such quotation.

 

 

5

Purchaser Initial: ______

 

Company Initial: ____   _   

 

  

  

 

c.           Authorized Shares.

(i)           The authorized capital stock of the Company consists of 200,000,000 shares of Common Stock, $0.001 par value and 5,000,000 shares of Preferred Stock, $0.001 par value.

(ii)           The Company has sufficient authorized and unissued shares of Common Stock as may be necessary for the Purchaser to convert the principal amount of the Note and all interest accrued thereon and any other costs or fees that may be paid with the Company’s Common Stock pursuant to the terms of the Note.

 

d.           Transaction Documents and Stock.  This Agreement and each of the other Transaction Documents, and the Transactions contemplated thereby, have been duly and validly authorized by the Company, this Agreement has been duly executed and delivered by the Company and this Agreement is, and the Note and each of the other Transaction Documents, when executed and delivered by the Company, will be, valid and binding agreements of the Company enforceable in accordance with their respective terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium, and other similar laws affecting the enforcement of creditors’ rights generally.

e.           Non-contravention.  The execution and delivery of this Agreement and each of the other Transaction Documents by the Company, the issuance of the Securities, and the consummation by the Company of the other Transactions contemplated by this Agreement, the Note and the other Transaction Documents do not and will not conflict with or result in a breach by the Company of any of the terms or provisions of, or constitute a default under (i) the articles of incorporation or by-laws of the Company, each as currently in effect, (ii) any indenture, mortgage, deed of trust, or other material agreement or instrument to which the Company is a party or by which it or any of its properties or assets are bound, including any listing agreement for the Common Stock except as herein set forth, or (iii) to its knowledge, any existing applicable law, rule, or regulation or any applicable decree, judgment, or order of any court, United States federal or state regulatory body, administrative agency, or other governmental body having jurisdiction over the Company or any of its properties or assets, except such conflict, breach or default which would not have or result in a Material Adverse Effect.

f.           Approvals.  No authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or the shareholders of the Company is required to be obtained by the Company for the issuance and sale of the Securities to the Purchaser as contemplated by this Agreement, except such authorizations, approvals and consents that have been obtained.

g.           Filings.  None of the Company’s SEC Documents contained, at the time they were filed, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements made therein in light of the circumstances under which they were made, not misleading.

h.           Absence of Certain Changes.  Since the Last Audited Date, there has been no material adverse change and no Material Adverse Effect, except as disclosed in the Company’s SEC Documents.  Since the Last Audited Date, except as provided in the Company’s SEC Documents, the Company has not (i) incurred or become subject to any material liabilities (absolute or contingent) except liabilities incurred in the ordinary course of business consistent with past practices; (ii) discharged or satisfied any material lien or encumbrance or paid any material obligation or liability (absolute or contingent), other than current liabilities paid in the ordinary course of business consistent with past practices; (iii) declared or made any payment or distribution of cash or other property to shareholders with respect to its capital stock, or purchased or redeemed, or made any agreements to purchase or redeem, any shares of its capital stock; (iv) sold, assigned or transferred any other tangible assets, or canceled any debts owed to the Company by any third party or claims of the Company against any third party, except in the ordinary course of business consistent with past practices; (v) waived any rights of material value, whether or not in the ordinary course of business, or suffered the loss of any material amount of existing business; (vi) made any increases in employee compensation, except in the ordinary course of business consistent with past practices; or (vii) experienced any material problems with labor or management in connection with the terms and conditions of their employment.

 

 

6

Purchaser Initial: ______

 

Company Initial: ____   _   

 

  

  

i.           Full Disclosure.  To the best of the Company’s knowledge, there is no fact known to the Company (other than general economic conditions known to the public generally or as disclosed in the Company’s SEC Documents) that has not been disclosed in writing to the Purchaser that would reasonably be expected to have or result in a Material Adverse Effect.

j.           Absence of Litigation.  There is no action, suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of the Company, threatened against or affecting the Company before or by any governmental authority or nongovernmental department, commission, board, bureau, agency or instrumentality or any other person, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect or which would adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations under, any of the Transaction Documents.  The Company is not aware of any valid basis for any such claim that (either individually or in the aggregate with all other such events and circumstances) could reasonably be expected to have a Material Adverse Effect.  There are no outstanding or unsatisfied judgments, orders, decrees, writs, injunctions or stipulations to which the Company is a party or by which it or any of its properties is bound, that involve the transaction contemplated herein or that, alone or in the aggregate, could reasonably be expect to have a Material Adverse Effect.

k.           Absence of Events of Default.  Except as set forth in the Company’s SEC Documents, (i) neither the Company nor any of its subsidiaries is in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any material indenture, mortgage, deed of trust or other material agreement to which it is a party or by which its property is bound, and (ii) no Event of Default (or its equivalent term), as defined in the respective agreement to which the Company or its Subsidiary is a party, and no event which, with the giving of notice or the passage of time or both, would become an Event of Default (or its equivalent term) (as so defined in such agreement), has occurred and is continuing, which would have a Material Adverse Effect.

l.           No Undisclosed Liabilities or Events.  To the best of the Company’s knowledge, the Company has no liabilities or obligations other than those disclosed in the Transaction Documents or the Company’s SEC Documents or those incurred in the ordinary course of the Company’s business since the Last Audited Date, or which individually or in the aggregate, do not or would not have a Material Adverse Effect.  No event or circumstances has occurred or exists with respect to the Company or its properties, business, operations, condition (financial or otherwise), or results of operations, which, under applicable law, rule or regulation, requires public disclosure or announcement prior to the date hereof by the Company but which has not been so publicly announced or disclosed.  There are no proposals currently under consideration or currently anticipated to be under consideration by the Board of Directors or the executive officers of the Company which proposal would (x) change the articles or certificate of incorporation or other charter document or by-laws of the Company, each as currently in effect, with or without shareholder approval, which change would reduce or otherwise adversely affect the rights and powers of the shareholders of the Common Stock or (y) materially or substantially change the business, assets or capital of the Company, including its interests in subsidiaries.

 

 

7

Purchaser Initial: ______

 

Company Initial: ____   _   

 

  

  

m.           No Integrated Offering.  Neither the Company nor any of its Affiliates nor any Person acting on its or their behalf has, directly or indirectly, at any time since August 31, 2014, made any offer or sales of any security or solicited any offers to buy any security under circumstances that would eliminate the availability of the exemption from registration under Regulation D in connection with the offer and sale of the Securities as contemplated hereby.

n.           Dilution. Any shares of the Company’s Common Stock issued to the Purchaser in connection with any agreements between the parties hereto, in the event such shares are issued may have a dilutive effect on the ownership interests of the other shareholders (and Persons having the right to become shareholders) of the Company.  The Company’s executive officers and directors have studied and fully understand the nature of the Securities being sold hereby and recognize that they have such a potential dilutive effect.  The board of directors of the Company has concluded, in its good faith business judgment, that such issuance is in the best interests of the Company.

o.           Confirmation.  The Company confirms that all statements of the Company contained herein shall survive acceptance of this Agreement by the Purchaser.  The Company agrees that, if any events occur or circumstances exist prior to the First Closing Date or the Second Closing Date or the release of the First Advance Amount or, if funded, the Second Advance Amount, to the Company which would make any of the Company’s representations, warranties, agreements or other information set forth herein materially untrue or materially inaccurate as of such date, the Company shall immediately notify the Purchaser (directly or through its counsel, if any) in writing prior to such date of such fact, specifying which representation, warranty or covenant is affected and the reasons therefor.

p.           Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the Transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations thereunder.  The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the Transactions contemplated thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company in connection therewith.  Each  Transaction Document has been (or upon  delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

q.           SEC Reports; Financial Statements.  The Company has filed all reports required to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law to file such material) (the foregoing materials, including the exhibits thereto, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The financial statements of the Company comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto (except that unaudited financial statements may not contain all of the footnotes required by GAAP), and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

 

8

Purchaser Initial: ______

 

Company Initial: ____   _   

 

  

  

r.           Sarbanes-Oxley; Internal Accounting Controls.  The Company is and will continue to be in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the First Closing Date and the Second Closing Date.  The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company, including its Subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s most recently filed periodic report under the Exchange Act is being prepared.  The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of the date prior to the filing date of the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).  The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the Company’s knowledge, in other factors that could significantly affect the Company’s internal controls.

s.           Tax Status.  Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company or any Subsidiary.

t.           No Disagreements with Accountants and Lawyers.  There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers.  By making this representation the Company does not, in any manner, waive the attorney/client privilege or the confidentiality of the communications between the Company and its lawyers.

 

 

9

Purchaser Initial: ______

 

Company Initial: ____   _   

 

  

  

u.           No Disqualification Events. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d) under the 1933 Act (a “Disqualification Event”).  The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Issuer has complied, to the extent applicable, with its disclosure obligations under Rule 506(e).

v.           Shell Company Status. The Company is not, and has never been, an issuer identified in Rule 144(i)(1).

 

4.           CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

a.           Transfer Restrictions.  The  Purchaser acknowledges that (1) the Securities have not been registered under the provisions of the 1933 Act and that the Securities may not be transferred unless (A) subsequently registered thereunder or (B) the Purchaser shall have delivered to the Company an opinion of counsel, reasonably satisfactory in form, scope and substance to the Company, to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration; (2) any sale of the Securities made in reliance on Rule 144 promulgated under the 1933 Act (“Rule 144”) may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any resale of such Securities under circumstances in which the seller, or the Person through whom the sale is made, may be deemed to be an underwriter, as that term is used in the 1933 Act, may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (3) neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or to comply with the terms and conditions of any exemption thereunder.

b.           Restrictive Legend.  The Purchaser acknowledges and agrees that the certificates and other instruments representing any of the Securities shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of any such Securities):

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”

c.           Filings.  The Company undertakes and agrees to make all necessary filings in connection with the sale of the Securities to the Purchaser under any United States laws and regulations applicable to the Company, or by any domestic securities exchange or trading market, and to provide a copy thereof to the Purchaser promptly after such filing.

 

 

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Purchaser Initial: ______

 

Company Initial: ____   _   

 

  

  

 

d.           Reporting Status.  So long as the Purchaser beneficially owns any of the Securities, the Company shall file all reports required to be filed with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, shall take all reasonable action under its control to ensure that adequate current public information with respect to the Company, as required in accordance with Rule 144(c)(2) of the 1933 Act, is publicly available, and shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would permit such termination.  The Company will take all reasonable action under its control to maintain the continued listing and quotation and trading of its Common Stock on the Principal Trading Market or a listing on the NASDAQ Capital Market and, to the extent applicable to it, will comply in all material respects with the Company’s reporting, filing and other obligations under the by-laws or rules of the Principal Trading Market and/or the Financial Industry Regulatory Authority, as the case may be, applicable to it for so long as the Purchaser beneficially owns any of the Securities.

e.           Use of Proceeds.  The Company will use the proceeds received hereunder (excluding amounts paid by the Company for legal fees in connection with the sale of the Securities and as the original issue discount) for working capital.

f.           Publicity, Filings, Releases, Etc.  Each of the parties agrees that it will not disseminate any information relating to the Transaction Documents or the Transactions contemplated thereby, including issuing any press releases, holding any press conferences or other forums, or filing any reports (collectively, “Publicity”), without giving the other party reasonable advance notice and an opportunity to comment on the contents thereof.  Neither party will include in any such Publicity any statement or statements or other material to which the other party reasonably objects, unless in the reasonable opinion of counsel to the party proposing such statement, such statement is legally required to be included.  In furtherance of the foregoing, the Company will provide to the Purchaser drafts of the applicable text of the first filing of a Current Report on Form 8-K or a Quarterly or Annual Report on Form 10-Q or 10-K intended to be made with the SEC which refers to the Transaction Documents or the Transactions contemplated thereby as soon as practicable (but at least 2 Trading Days before such filing will be made) will not include in such filing any statement or statements or other material to which the other party reasonably objects, unless in the reasonable opinion of counsel to the party proposing such statement, such statement is legally required to be included.  Notwithstanding the foregoing, each of the parties hereby consents to the inclusion of the text of the Transaction Documents in filings made with the SEC as well as any descriptive text accompanying or as a part of such filing which is accurate and reasonably determined by the Company’s counsel to be legally required.  Notwithstanding, but subject to, the foregoing provisions of this Section 4f, the Company will, after the First Closing Date and the Second Closing Date, as applicable, promptly file a Current Report on Form 8-K or, if appropriate, a quarterly or annual report on the appropriate form, referring to the Transactions contemplated by the Transaction Documents.

 

5.           TRANSFER AGENT INSTRUCTIONS.

 

a.           The Company warrants that, with respect to the Securities, other than the stop transfer instructions to give effect to Section 4a hereof, it will give its transfer agent no instructions inconsistent with instructions to issue Common Stock to the Holder as contemplated in the Note.  Nothing in this Section shall affect in any way the Purchaser’s obligations and agreement to comply with all applicable securities laws upon resale of the Securities.  If the Purchaser provides the Company with an opinion of counsel reasonably satisfactory to the Company that registration of a resale by the Purchaser of any of the Securities in accordance with clause (1)(B) of Section 4a of this Agreement is not required under the 1933 Act, the Company shall (except as provided in clause (2) of Section 4a of this Agreement) permit the transfer or reissue of the Shares represented by one or more certificates for Common Stock without legend (or where applicable, by electronic registration) in such name and in such denominations as specified by the Purchaser.

 

 

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Company Initial: ____   _   

 

  

  

b.           The Company will authorize the Transfer Agent to give information relating to the Company directly to the Holder or the Holder’s representatives upon the request of the Holder or any such representative, to the extent such information relates to (i) the status of the shares of Common Stock issued or claimed to be issued to the Holder in connection with a Notice of Conversion in accordance with the terms of the Note, or (ii) the aggregate number of outstanding shares of Common Stock of all shareholders (as a group, and not individually) as of a current or other specified date.  At the request of the Holder, the Company will provide the Holder with a copy of the authorization so given to the Transfer Agent.

 

6.           CLOSING DATES.

a.           The First Closing Date and, if the Second Advance Amount is funded, the Second Closing Date, as applicable, shall occur after each of the conditions contemplated by Sections 7 and 8 hereof shall have either been satisfied or been waived by the party in whose favor such conditions run.

b.           The First Closing Date and, if the Second Advance Amount is funded, the Second Closing Date shall occur at the offices of the Purchaser or by electronic communications and shall take place no later than 3:00 p.m. Eastern time on such day or such other time as is mutually agreed upon by the Company and the Purchaser.

7.           CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

 

The Purchaser understands that the Company’s obligation to sell the Note to the Purchaser pursuant to this Agreement is conditioned upon:

a.           The execution and delivery of this Agreement by the Purchaser on the First Closing Date;

b.           Delivery by the Purchaser to the Company of good funds in the amount of the First Advance Amount and, if funded, the Second Advance Amount, as applicable, in accordance with the Note and this Agreement;

c.           The accuracy on the First Closing Date and the Second Closing Date of the representations and warranties of the Purchaser contained in this Agreement, each as if made on such date, and the performance by the Purchaser on or before such date of all covenants and agreements of the Purchaser required to be performed on or before such date; and

d.           There shall not be in effect any law, rule or regulation prohibiting or restricting the Transactions contemplated hereby, or requiring any consent or approval which shall not have been obtained.

8.           CONDITIONS TO THE PURCHASER’S OBLIGATION TO FUND THE FIRST ADVANCE

AMOUNT AND THE SECOND ADVANCE AMOUNT.

 

 

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Company Initial: ____   _   

 

  

  

 

The Company understands that the Purchaser’s obligation to fund the First Advance Amount and, if funded, the Second Advance Amount and its acceptance of any Shares of the Company’s Common Stock that may be issued in connection with the Note is conditioned upon:

a.           The execution by the Company and the delivery to the Purchaser of this Agreement and the Note on the First Closing Date;

b.           The execution by the Company and the delivery to the Transfer Agent of an instruction letter in the form of Annex II hereto.

c.           The accuracy in all material respects on the First Closing Date and the Second Closing Date of the representations and warranties of the Company contained in this Agreement, each as if made on such date, and the performance by the Company on or before such date of all covenants and agreements of the Company required to be performed on or before such date;

d.           The Company must be current with all required Exchange Act filings.

e.           There shall not be in effect any law, rule or regulation prohibiting or restricting the Transactions contemplated hereby, or requiring any consent or approval which shall not have been obtained; and

f.           From and after the date hereof to and including both the First Closing Date and the Second Closing Date, each of the following conditions will remain in effect: (i) the trading of the Common Stock shall not have been suspended by the SEC or on the Principal Trading Market; (ii) trading in securities generally on the Principal Trading Market shall not have been suspended or limited; (iii) no minimum prices shall been established for securities traded on the Principal Trading Market; and (iv) there shall not have been any Material Adverse Effect in regards to the Company.

 

9.           ADDITIONAL INVESTMENT RIGHT.

The Company agrees that for a period of 12 months from the First Closing Date, if the Company undertakes to raise funds through the issuance of any form or type of convertible promissory note or convertible debenture, the Purchaser shall have the right (but not the obligation) to require the Company to issue to the Purchaser one or more additional convertible promissory notes or debentures, the aggregate principal amount of which will not exceed $500,000, on terms and conditions as near as possible to the terms and conditions included in the Transaction Documents.

10.           INDEMNIFICATION AND REIMBURSEMENT.

a.           (i)  The Company agrees to indemnify and hold harmless the Purchaser and its officers, directors, employees, and agents, and each Purchaser Control Person from and against any losses, claims, damages, liabilities or expenses incurred (collectively, “Damages”), joint or several, and any action in respect thereof to which the Purchaser, its partners, Affiliates, officers, directors, employees, and duly authorized agents, and any such Purchaser Control Person becomes subject to, resulting from, arising out of or relating to any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of Company contained in this Agreement, as such Damages are incurred, except to the extent such Damages result primarily from Purchaser’s failure to perform any covenant or agreement contained in this Agreement or the Purchaser’s or its officer’s, director’s, employee’s, agent’s or Purchaser Control Person’s negligence, recklessness or bad faith in performing its obligations under this Agreement.

 

 

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Company Initial: ____   _   

 

  

  

 

(ii)  The Company hereby agrees that, if the Purchaser, other than by reason of its negligence, illegal or willful misconduct (in each case, as determined by a non- appealable judgment to such effect), (x) becomes involved in any capacity in any action, proceeding or investigation brought by any shareholder of the Company, in connection with or as a result of the consummation of the Transactions contemplated by this Agreement or the other Transaction Documents, or if the Purchaser is impleaded in any such action, proceeding or investigation by any Person, or (y) becomes involved in any capacity in any action, proceeding or investigation brought by the SEC, any self-regulatory organization or other body having jurisdiction, against or involving the Company or in connection with or as a result of the consummation of the Transactions contemplated by this Agreement or the other Transaction Documents, or (z) is impleaded in any such action, proceeding or investigation by any Person, then in any such case, the Company shall indemnify, defend and hold harmless the Purchaser from and against and in respect of all losses, claims, liabilities, damages or expenses resulting from, imposed upon or incurred by the Purchaser, directly or indirectly, and reimburse such Purchaser for its reasonable legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith, as such expenses are incurred.  The indemnification and reimbursement obligations of the Company under this paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and conditions to any Affiliates of the Purchaser who are actually named in such action, proceeding or investigation, and partners, directors, agents, employees and Purchaser Control Persons (if any), as the case may be, of the Purchaser and any such Affiliate, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company, the Purchaser, any such Affiliate and any such Person.  The Company also agrees that neither the Purchaser nor any such Affiliate, partner, director, agent, employee or Purchaser Control Person shall have any liability to the Company or any Person asserting claims on behalf of or in right of the Company in connection with or as a result of the consummation of this Agreement or the other Transaction Documents, except as may be expressly and specifically provided in or contemplated by this Agreement.

 

b.           All claims for indemnification by any Indemnified Party (as defined below) under this Section shall be asserted and resolved as follows:

 

(i)           In the event any claim or demand in respect of which any Person claiming indemnification under any provision of this Section (an “Indemnified Party”) might seek indemnity under paragraph a of this Section is asserted against or sought to be collected from such Indemnified Party by a Person other than a party hereto or an Affiliate thereof (a “Third Party Claim”), the Indemnified Party shall deliver a written notification, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party’s claim for indemnification that is being asserted under any provision of this Section against any Person (the “Indemnifying Party”), together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such Third Party Claim (a “Claim Notice”) with reasonable promptness to the Indemnifying Party.  If the Indemnified Party fails to provide the Claim Notice with reasonable promptness after the Indemnified Party receives notice of such Third Party Claim, the Indemnifying Party shall not be obligated to indemnify the Indemnified Party with respect to such Third Party Claim to the extent that the Indemnifying Party’s ability to defend has been prejudiced by such failure of the Indemnified Party.  The Indemnifying Party shall notify the Indemnified Party as soon as practicable within the period ending 30 calendar days following receipt by the Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined below) (the “Dispute Period”) whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party under this Section and whether the Indemnifying Party desires, at its sole cost and expense, to defend the Indemnified Party against such Third Party Claim. The following provisions shall also apply.

 

 

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Company Initial: ____   _   

 

  

  

(x)          If the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Indemnified Party with respect to the Third Party Claim pursuant to this paragraph b of this Section, then the Indemnifying Party shall have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, such Third Party Claim by all appropriate proceedings, which proceedings shall be vigorously and diligently prosecuted by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the consent of the Indemnified Party in the case of any settlement that provides for any relief other than the payment of monetary damages or that provides for the payment of monetary damages as to which the Indemnified Party shall not be indemnified in full pursuant to paragraph a of  this Section).  The Indemnifying Party shall have full control of  such defense and proceedings, including any compromise or settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified Party, at any time prior to the Indemnifying Party’s delivery of the notice referred to in the first sentence of this subparagraph (x), file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary or appropriate protect its interests; and provided further, that if requested by the Indemnifying Party, the Indemnified Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting any Third Party Claim that the Indemnifying Party elects to contest.  The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this subparagraph (x), and except as provided in the preceding sentence, the Indemnified Party shall bear its own costs and expenses with respect to such participation.  Notwithstanding the foregoing, the Indemnified Party may take over the control of the defense or settlement of a Third Party Claim at any time if it irrevocably waives its right to indemnity under paragraph a of this Section with respect to such Third Party Claim.

 

(y)          If the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Third Party Claim pursuant to paragraph b of this Section, or if the Indemnifying Party gives such notice but fails to prosecute vigorously and diligently or settle the Third Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within the Dispute Period, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings shall be prosecuted by the Indemnified Party in a reasonable manner and in good faith or will be settled at the discretion of the Indemnified Party (with the consent of the Indemnifying Party, which consent will not be unreasonably withheld).  The Indemnified Party will have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that if requested by the Indemnified Party, the Indemnifying Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its counsel in contesting any Third Party Claim which the Indemnified Party is contesting.  Notwithstanding the foregoing provisions of this subparagraph (y), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying Party disputes its liability or the amount of its liability hereunder to the Indemnified Party with respect to such Third Party Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in subparagraph (z) below, the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party’s defense pursuant to this subparagraph (y) or of the Indemnifying Party’s participation therein at the Indemnified Party’s request, and the Indemnified Party shall reimburse the Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection with such litigation.  The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this subparagraph (y), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.

 

 

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Company Initial: ____   _   

 

  

  

 

(z)          If the Indemnifying Party notifies the Indemnified Party that it does not dispute its liability or the amount of its liability to the Indemnified Party with respect to the Third Party Claim under paragraph a of this Section or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party with respect to such Third Party Claim, the amount of Damages specified in the Claim Notice shall be conclusively deemed a liability of the Indemnifying Party under paragraph a of this Section and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand.  If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within 30 days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.

 

(ii)           In the event any Indemnified Party should have a claim under paragraph a of this Section against the Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party shall deliver a written notification of a claim for indemnity under paragraph a of this Section specifying the nature of and basis for such claim, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such claim (an “Indemnity Notice”) with reasonable promptness to the Indemnifying Party.  The failure by any Indemnified Party to give the Indemnity Notice shall not impair such party’s rights hereunder except to the extent that the Indemnifying Party demonstrates that it has been irreparably prejudiced thereby.  If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim or the amount of the claim described in such Indemnity Notice or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim or the amount of the claim described in such Indemnity Notice, the amount of Damages specified in the Indemnity Notice will be conclusively deemed a liability of the Indemnifying Party under paragraph a of this Section and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand.  If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that it the dispute is not resolved within 30 days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.

 

 

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Company Initial: ____   _   

 

  

  

c.           The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar rights of the Indemnified Party against the Indemnifying Party or others, and (ii) any liabilities the Indemnifying Party may be subject to.

 

11.           JURY TRIAL WAIVER.  The Company and the Purchaser hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other in respect of any matter arising out or in connection with the Transaction Documents.

12.           REGISTRATION RIGHTS

a.           Should the Company determine to file with the SEC a registration statement under the 1933 Act (other than on Form S-4 or Form S-8 or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other bona fide employee benefit plans or equity securities to be issued solely in connection with a bona fide firm underwritten public offering of the Company’s securities) relating to an offering which includes common stock underlying securities issued by the Company that are exercisable or convertible into shares of the Company’s common stock, which offering is for its own account or the account of others, the Company shall send to the Purchaser written notice of such determination and, if within 20 days after such notice, the Purchaser shall so request in writing, the Company shall include in such registration statement all or any part of the Registrable Securities such Purchaser requests to be registered.  Notwithstanding any other provision of this Agreement, the Company may withdraw any registration statement referred to in this Section 12a without incurring any liability to the Purchaser.  Furthermore, notwithstanding any other provision of this Agreement, the Purchaser shall have no registration rights with respect to any registration statement of the Company that was initially filed prior to the First Closing Date.

b.           In the event the staff of the SEC (the “Staff”) or the SEC seeks to characterize any offering pursuant to the registration statement filed by the Company as constituting an offering of securities by, or on behalf of, the Company, or in any other manner, such that the Staff or the SEC do not permit such Registration Statement to become effective and used for resales in a manner that does not constitute such an offering and that permits the continuous resale at the market by the Purchaser and others participating therein without being named therein as an “underwriter,” then the Company shall reduce the number of shares to be included in such Registration Statement by the Purchaser and all others until such time as the Staff and the SEC shall permit the registration statement to become effective.  In making such reduction, the Company shall reduce the number of securities to be included by the Purchaser and all others on a pro rata basis (based upon the number of securities to be included in the registration statement).

c.           The Company shall:

(i)           use commercially reasonable efforts to cause the registration statement to be declared effective by the SEC as soon as possible, but in any event not later than the fifth trading day following the date on which the Company is notified by the SEC that the registration statement will not be reviewed or is no longer subject to further review and comment;

(ii)           use commercially reasonable efforts to prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection therewith (the “Prospectus”) as may be necessary to keep the registration statement continuously current, effective and free from any material misstatement or omission to state a material fact for a period not exceeding, with respect to the Registrable Securities, from the date it is first declared effective until the earlier of (A) the date on which the Purchaser may sell all Registrable Securities then held by the Purchaser pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (B) the public sale of all of the Registrable Securities;

 

 

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(iii)           furnish to the Purchaser with respect to the Registrable Securities such number of copies of the registration statement, Prospectuses and preliminary Prospectuses in conformity with the requirements of the 1933 Act and such other documents as the Purchaser may reasonably request in writing, in order to facilitate the public sale or other disposition of all or any of the Registrable Securities by the Purchaser; provided, however, that the obligation of the Company to deliver copies of Prospectuses or preliminary Prospectuses to the Purchaser shall be subject to the receipt by the Company of reasonable assurances from the Purchaser that the Purchaser will comply with the applicable provisions of the 1933 Act and of such other securities or blue sky laws as may be applicable in connection with any use of such Prospectuses or Preliminary Prospectuses;

(iv)           file documents required of the Company for blue sky clearance in states specified in writing by the Purchaser and use its commercially reasonable efforts to maintain such blue sky qualifications during the period the Company is required to maintain the effectiveness of the Registration Statement pursuant to Section 12c.(ii); provided, however, that the Company shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented;

(v)           bear all expenses in connection with the preparation and filing of the registration statement (other than any underwriting discounts or commissions, brokers’ fees and similar selling expenses, and any other fees or expenses incurred by the Purchaser, including attorneys’ fees); and

(vi)           advise the Purchaser in writing promptly after it shall receive notice or obtain knowledge of the issuance of any stop order by the SEC delaying or suspending the effectiveness of the registration statement or of the initiation or threat of any proceeding for that purpose; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued.

13.           GOVERNING LAW:  MISCELLANEOUS.

a.           (i)   This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws.  Each of the parties consents to the exclusive jurisdiction of the federal courts in New York County in the State of New York as in connection with any dispute arising under this Agreement or any of the other Transaction Documents and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions or to any claim that such venue of the suit, action or proceeding is improper.  To the extent determined by such court, the Company shall reimburse the Purchaser for any reasonable legal fees and disbursements incurred by the Purchaser in enforcement of or protection of any of its rights under any of the Transaction Documents.  Nothing in this Section shall affect or limit any right to serve process in any other manner permitted by law.

 

 

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(ii)           The Company and the Purchaser acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement or the other Transaction Documents were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and the other Transaction Documents and to enforce specifically the terms and provisions hereof and thereof, this being in addition to any other remedy to which any of them may be entitled by law or equity.

 

b.           Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

c.           This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto.

d.           All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require.

e.           A facsimile transmission of this signed Agreement shall be legal and binding on all parties hereto.

f.           This Agreement may be signed in one or more counterparts, each of which shall be deemed an original.

g.           The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

h.           If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other jurisdiction.

i.           This Agreement may be amended only by an instrument in writing signed by the party to be charged with enforcement thereof.

j.           This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.

14.           NOTICES.  Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the earliest of

 

(a)           the date delivered, if delivered by personal delivery as against written receipt therefor or by confirmed facsimile transmission,

 

(b)           the fifth Trading Day after deposit, postage prepaid, in the United States Postal Service by registered or certified mail, or

 

(c)           the third Trading Day after mailing by domestic or international express courier, with delivery costs and fees prepaid,

 

 

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in each case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by 10 days’ advance written notice similarly given to each of the other parties hereto):

 

COMPANY:                      Boston Therapeutics, Inc.

1750 Elm Street, Suite 103

Manchester, New Hampshire 03104

Attn: David Platt

Telephone No.: (603) 935-9799

Facsimile No.: (603) 685-4784

 

PURCHASER:                     JDF CAPITAL INC.

                                                96 Village Center Drive

                                               Freehold, New Jersey 07728

                                               Attn: John Fierro

                                               Telephone No.: (718) 290-4058

                                               Facsimile No.: (800) 319-6863

15.           SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  The Company’s and the Purchaser’s representations and warranties herein shall survive the execution and delivery of this Agreement and the delivery of the Note and the payment of the Purchase Amount, and shall inure to the benefit of the Purchaser and the Company and their respective successors and assigns.

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by the Purchaser and the Company as of the date set first above written.

JDF CAPITAL INC.

 

 

 

By:    ________________________                                        

Name:  John Fierro

Title:            President

 

BOSTON THERAPEUTICS, INC.

By:     ___________________________________                                                            

(Signature of Authorized Person)

 

David Platt, Chief Executive Officer

Printed Name and Title

 

 

 

 

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Company Initial: ____   _   

 

  

  

 

 

ANNEX I

 

FORM OF NOTE

 

 

 

  

  

  

 

 

ANNEX II

 

 

INSTRUCTION LETTER TO TRANSFER AGENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00245-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00245-of-00352.parquet"}]]