Document:

Exhibit 10.1

 

EXECUTION VERSION

 

 

Nomura Global Financial Products Inc.

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

 

	
 
    	
March 4, 2014
    
	
To:
    	
Cowen Group, Inc.
    
	
 
    	
599 Lexington Avenue
    
	
 
    	
21st Floor
    
	
 
    	
New York, NY 10022
    
	
 
    	
Facsimile No.:
    	
(212) 845-7999; (212) 201-4840
    
	
 
    	
Attention:
    	
Stephen Lasota, Chief Financial Officer
    
	
 
    	
Telephone No.:
    	
(212) 845-7917
    
	
 
    	
 
    
	
Re:
    	
Call Option Transaction
    
				

 

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

 

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

 

 

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

 

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

 

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

 

	
General Terms.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Trade Date:
    	
 
    	
March 4, 2014
    
	
 
    	
 
    	
 
    
	
Effective Date:
    	
 
    	
The third Exchange Business Day immediately prior to   the Premium Payment Date
    
	
 
    	
 
    	
 
    
	
Option Style:
    	
 
    	
“Modified American”, as described under “Procedures   for Exercise” below
    
	
 
    	
 
    	
 
    
	
Option Type:
    	
 
    	
Call
    
	
 
    	
 
    	
 
    
	
Buyer:
    	
 
    	
Counterparty
    
	
 
    	
 
    	
 
    
	
Seller:
    	
 
    	
Nomura
    
	
 
    	
 
    	
 
    
	
Shares:
    	
 
    	
The Class A Common Stock of Counterparty, par   value USD 0.01 per share (Exchange symbol “COWN”).
    
	
 
    	
 
    	
 
    
	
Number of Options:
    	
 
    	
130,000. For the avoidance of doubt, the Number of   Options shall be reduced by any Options exercised by Counterparty. In no   event will the Number of Options be less than zero.
    
	
 
    	
 
    	
 
    
	
Option Entitlement:
    	
 
    	
187.6173.
    
	
 
    	
 
    	
 
    
	
Strike Price:
    	
 
    	
USD 5.33
    
	
 
    	
 
    	
 
    
	
Premium:
    	
 
    	
USD 31,052,408.93
    
	
 
    	
 
    	
 
    
	
Premium Payment Date:
    	
 
    	
The Closing Date
    
	
 
    	
 
    	
 
    
	
Closing Date:
    	
 
    	
March 10, 2014
    
	
 
    	
 
    	
 
    
	
Exchange:
    	
 
    	
The NASDAQ Global Select Market
    
	
 
    	
 
    	
 
    
	
Related Exchange(s):
    	
 
    	
All Exchanges
    
	
 
    	
 
    	
 
    
	
Excluded Provisions:
    	
 
    	
Section 14.03 and Section 14.04(g) of   the Indenture.
    

 

2

 

	
Procedures for Exercise.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Conversion Date:
    	
 
    	
With respect to any conversion of a Convertible   Note, the date on which the Holder (as such term is defined in the Indenture)   of such Convertible Note satisfies all of the requirements for conversion   thereof as set forth in Section 14.02(b) of the Indenture; provided that in no event shall a Conversion Date be   deemed to occur hereunder (and no Option shall be exercised or deemed to be   exercised hereunder) with respect to any Convertible Note surrendered for   conversion in respect of which Counterparty has elected to designate (and   such designation is accepted) a financial institution for exchange in lieu of   conversion of such Convertible Note pursuant to Section 14.12 of the   Indenture (regardless of whether such financial institution delivers any   amounts due in respect of such Convertible Note).
    
	
 
    	
 
    	
 
    
	
Free Convertibility Date:
    	
 
    	
September 15, 2018
    
	
 
    	
 
    	
 
    
	
Expiration Time:
    	
 
    	
The Valuation Time
    
	
 
    	
 
    	
 
    
	
Expiration Date:
    	
 
    	
March 15, 2019, subject to earlier exercise.
    
	
 
    	
 
    	
 
    
	
Multiple Exercise:
    	
 
    	
Applicable, as described under “Automatic Exercise”   below.
    
	
 
    	
 
    	
 
    
	
Automatic Exercise:
    	
 
    	
Notwithstanding Section 3.4 of the Equity   Definitions, and subject to Section 9(g)(ii), on each Conversion Date in   respect of which a Notice of Conversion that is effective as to Counterparty   has been delivered by the relevant converting Holder, a number of Options   equal to the number of Convertible Notes in denominations of USD 1,000 as to   which such Conversion Date has occurred shall be deemed to be automatically   exercised; provided that such Options   shall be exercised or deemed exercised only if Counterparty has provided a   Notice of Exercise to Nomura in accordance with “Notice of Exercise” below.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding the foregoing, in no event shall the   number of Options that are exercised or deemed exercised hereunder exceed the   Number of Options.
    
	
 
    	
 
    	
 
    
	
Notice of Exercise:
    	
 
    	
Notwithstanding anything to the contrary in the   Equity Definitions or under “Automatic Exercise” above, in order to exercise   any Options, Counterparty must notify Nomura in writing before 5:00 p.m.   (New York City time) on the Scheduled Valid Day immediately preceding the   scheduled first day of the Settlement Averaging Period for the Options being   exercised of (i) the number of such Options and (ii) the scheduled   first day of the Settlement Averaging Period and the scheduled Settlement   Date; provided that in respect of Options   relating to Convertible Notes with a Conversion Date occurring on or after   the Free Convertibility Date, such notice may be given on or prior to the   second Scheduled
    

 

3

 

	
 
    	
 
    	
Valid Day immediately preceding the Expiration Date   and need only specify the number of such Options.
    
	
 
    	
 
    	
 
    
	
Valuation Time:
    	
 
    	
At the close of trading of the regular trading   session on the Exchange; provided that   if the principal trading session is extended, the Calculation Agent shall   determine the Valuation Time in its reasonable discretion.
    
	
 
    	
 
    	
 
    
	
Market Disruption Event:
    	
 
    	
Section 6.3(a) of the Equity Definitions   is hereby replaced in its entirety by the following:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“‘Market Disruption Event’ means, in respect of a   Share, (i) a failure by the primary United States national or regional   securities exchange or market on which the Shares are listed or admitted for   trading to open for trading during its regular trading session or   (ii) the occurrence or existence prior to 1:00 p.m. (New York City   time) on any Scheduled Valid Day for the Shares for more than one half-hour   period in the aggregate during regular trading hours of any suspension or   limitation imposed on trading (by reason of movements in price exceeding   limits permitted by the relevant stock exchange or otherwise) in the Shares   or in any options contracts or futures contracts relating to the Shares.”
    
	
 
    	
 
    	
 
    
	
Settlement Terms.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Settlement Method:
    	
 
    	
Cash Settlement
    
	
 
    	
 
    	
 
    
	
Cash Settlement:
    	
 
    	
In lieu of Section 8.1 of the Equity   Definitions, Nomura will pay to Counterparty, on the relevant Settlement   Date, the Option Cash Settlement Amount in respect of any Option exercised or   deemed exercised hereunder. In no event will the Option Cash Settlement   Amount be less than zero.
    
	
 
    	
 
    	
 
    
	
Option Cash Settlement Amount:
    	
 
    	
In respect of any Option exercised or deemed   exercised, an amount in cash equal to (A) the sum of the products, for   each Valid Day during the Settlement Averaging Period for such Option, of   (x) the Option Entitlement on such Valid Day multiplied   by (y) the Relevant Price on such Valid Day less the Strike Price, divided by   (B) the number of Valid Days in the Settlement Averaging Period; provided that if the calculation contained in clause   (y) above results in a negative number, such number shall be replaced   with the number “zero”.
    
	
 
    	
 
    	
 
    
	
Valid Day:
    	
 
    	
A day on which (i) there is no Market   Disruption Event and (ii) trading in the Shares generally occurs on the   Exchange or, if the Shares are not then listed on the Exchange, on the   principal other United States national or regional securities exchange on   which the Shares are then listed or, if the Shares are not then listed on a   United States national or regional securities exchange, on the principal   other market on which the Shares are then listed
    

 

4

 

	
 
    	
 
    	
or admitted for trading. If the Shares are not so   listed or admitted for trading, “Valid Day” means a Business Day.
    
	
 
    	
 
    	
 
    
	
Scheduled Valid Day:
    	
 
    	
A day that is scheduled to be a Valid Day on the   principal United States national or regional securities exchange or market on   which the Shares are listed or admitted for trading. If the Shares are not so   listed or admitted for trading, “Scheduled Valid Day” means a Business Day.
    
	
 
    	
 
    	
 
    
	
Business Day:
    	
 
    	
Any day other than a Saturday, a Sunday or a day on   which the Federal Reserve Bank of New York is authorized or required by law   or executive order to close or be closed.
    
	
 
    	
 
    	
 
    
	
Relevant Price:
    	
 
    	
On any Valid Day, the per Share volume-weighted   average price as displayed under the heading “Bloomberg VWAP” on Bloomberg   page COWN <equity> AQR (or its equivalent successor if such   page is not available) in respect of the period from the scheduled open   of trading until the scheduled close of trading of the primary trading   session on such Valid Day (or if such volume-weighted average price is   unavailable at such time, the market value of one Share on such Valid Day, as   determined by the Calculation Agent using, if practicable, a volume-weighted   average method). The Relevant Price will be determined without regard to   after hours trading or any other trading outside of the regular trading   session trading hours.
    
	
 
    	
 
    	
 
    
	
Settlement Averaging Period:
    	
 
    	
For any Option:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i)                                     if the related Conversion Date occurs prior to the Free   Convertibility Date, the 80 consecutive Valid Days commencing on, and including, the   second Valid Day following such Conversion Date; or
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(ii)                                  if the related Conversion Date occurs on or following the Free   Convertibility Date, the 80 consecutive Valid Days commencing on, and including, the 82nd   Scheduled Valid Day immediately prior to the Expiration Date.
    
	
 
    	
 
    	
 
    
	
Settlement Date:
    	
 
    	
For any Option, the date cash is paid under the   terms of the Indenture with respect to the conversion of the Convertible Note   related to such Option.
    
	
 
    	
 
    	
 
    
	
Settlement Currency:
    	
 
    	
USD
    
	
 
    	
 
    	
 
    
	
3.                                      Additional Terms applicable to the Transaction.
    
	
 
    	
 
    	
 
    
	
Adjustments applicable to the Transaction:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Potential Adjustment Events:
    	
 
    	
Notwithstanding Section 11.2(e) of the   Equity Definitions, a “Potential Adjustment Event” means an occurrence of any   event or condition, as set forth in any Dilution Adjustment Provision, that   would result in an adjustment under the Indenture to the “Conversion Rate”
    

 

5

 

	
 
    	
 
    	
or the composition of a “unit of Reference Property”   or to any “Last Reported Sale Price” , “Daily VWAP,” “Daily Conversion   Value” or “Daily Settlement Amount” (each as defined in the Indenture). For   the avoidance of doubt, Nomura shall not have any delivery or payment   obligation hereunder, and no adjustment shall be made to the terms of the   Transaction, on account of (x) any distribution of cash, property or   securities by Counterparty to holders of the Convertible Notes (upon conversion   or otherwise) or (y) any other transaction in which holders of the   Convertible Notes are entitled to participate, in each case, in lieu of an   adjustment under the Indenture of the type referred to in the immediately   preceding sentence (including, without limitation, pursuant to the fourth   sentence of Section 14.04(c) of the Indenture or the last sentence   of Section 14.04(d) of the Indenture).
    
	
 
    	
 
    	
 
    
	
Method of Adjustment:
    	
 
    	
Calculation Agent Adjustment, which means that,   notwithstanding Section 11.2(c) of the Equity Definitions, upon any   Potential Adjustment Event, the Calculation Agent shall make a corresponding   adjustment to any one or more of the Strike Price, Number of Options, Option   Entitlement and any other variable relevant to the exercise, settlement or   payment for the Transaction.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding the foregoing and “Consequences of Merger Events/Tender   Offers” below, if the Calculation Agent in good faith disagrees with any   adjustment to the Convertible Notes that involves an exercise of discretion   by Counterparty or its board of directors (including, without limitation,   pursuant to Section 14.05 of the Indenture,   Section 14.07(a) of the Indenture or any supplemental indenture   entered into thereunder or in connection with any proportional adjustment or   the determination of the fair value of any securities, property, rights or   other assets), then in each such case, the Calculation Agent will determine   the adjustment to be made to any one or more of the Strike Price, Number of   Options, Option Entitlement and any other variable relevant to the exercise,   settlement or payment for the Transaction in a commercially reasonable manner.
    
	
 
    	
 
    	
 
    
	
Dilution Adjustment Provisions:
    	
 
    	
Section 14.04(a), (b), (c), (d) and   (e) and Section 14.05 of the Indenture.
    
	
 
    	
 
    	
 
    
	
Extraordinary Events applicable to the   Transaction:
    
	
 
    	
 
    	
 
    
	
Merger Events:
    	
 
    	
Applicable; provided that   notwithstanding Section 12.1(b) of the Equity Definitions, a   “Merger Event” means the occurrence of any event or condition set forth in   the definition of “Merger Event” in Section 14.07(a) of the   Indenture.
    

 

6

 

	
Tender Offers:
    	
 
    	
Applicable; provided that   notwithstanding Section 12.1(d) of the Equity Definitions, a   “Tender Offer” means the occurrence of any event or condition set forth in   Section 14.04(e) of the Indenture.
    
	
 
    	
 
    	
 
    
	
Consequence of Merger Events /
   Tender Offers:
    	
 
    	
Notwithstanding Section 12.2 and   Section 12.3 of the Equity Definitions, upon the occurrence of a Merger   Event or a Tender Offer, the Calculation Agent shall make a corresponding   adjustment in respect of any adjustment under the Indenture to any one or   more of the nature of the Shares (in the case of a Merger Event), Strike   Price, Number of Options, Option Entitlement and any other variable relevant to   the exercise, settlement or payment for the Transaction, subject to the   second paragraph under “Method of Adjustment”; provided, however, that such adjustment shall be made without   regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision;   provided further that if, with respect   to a Merger Event or a Tender Offer, (i) the consideration for the   Shares includes (or, at the option of a holder of Shares, may include) shares   of an entity or person that is not a corporation or is not organized under   the laws of the United States, any State thereof or the District of Columbia   or (ii) the Counterparty to the Transaction following such Merger Event   or Tender Offer, will not be a corporation or will not be the Issuer   following such Merger Event or Tender Offer, then Cancellation and Payment   (Calculation Agent Determination) may apply at Nomura’s sole election.
    
	
 
    	
 
    	
 
    
	
Nationalization, Insolvency or Delisting:
    	
 
    	
Cancellation and Payment (Calculation Agent   Determination); provided that,   in addition to the provisions of Section 12.6(a)(iii) of the Equity   Definitions, it will also constitute a Delisting if the Exchange is located   in the United States and the Shares are not immediately re-listed, re-traded   or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select   Market or The NASDAQ Global Market (or their respective successors); if the   Shares are immediately re-listed, re-traded or re-quoted on any of the New   York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market   (or their respective successors), such exchange or quotation system shall   thereafter be deemed to be the Exchange.
    
	
 
    	
 
    	
 
    
	
Additional Disruption Events:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Change in Law:
    	
 
    	
Applicable; provided that   Section 12.9(a)(ii) of the Equity Definitions is hereby amended by   (i) replacing the word “Shares” with the phrase “Hedge Positions” in   clause (X) thereof and (ii) inserting the parenthetical   “(including, for the avoidance of doubt and without limitation, adoption or   promulgation of new regulations authorized or mandated by existing statute)”   at the end of clause (A) thereof.
    

 

7

 

	
Failure to Deliver:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Hedging Disruption:
    	
 
    	
Applicable; provided   that:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i)                                     Section 12.9(a)(v) of the Equity Definitions is hereby   amended by (a) inserting the following words at the end of clause   (A) thereof: “in the manner contemplated by the Hedging Party on the   Trade Date” and (b) inserting the following two phrases at the end of   such Section:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“For the avoidance of doubt, the term “equity price   risk” shall be deemed to include, but shall not be limited to, stock price   and volatility risk. And, for the further avoidance of doubt, any such   transactions or assets referred to in phrases (A) or (B) above must   be available on commercially reasonable pricing terms.”; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(ii)                                  Section 12.9(b)(iii) of the Equity Definitions is hereby   amended by inserting in the third line thereof, after the words “to terminate   the Transaction”, the words “or a portion of the Transaction affected by such   Hedging Disruption”.
    
	
 
    	
 
    	
 
    
	
Increased Cost of Hedging:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Hedging Party:
    	
 
    	
For all applicable Additional Disruption Events,   Nomura.
    
	
 
    	
 
    	
 
    
	
Determining Party:
    	
 
    	
For all applicable Extraordinary Events, Nomura; provided that all determinations shall   be made in good faith and in a commercially reasonable manner.
    
	
 
    	
 
    	
 
    
	
Non-Reliance:
    	
 
    	
Applicable.
    
	
 
    	
 
    	
 
    
	
Agreements and Acknowledgements
    	
 
    	
 
    
	
Regarding Hedging Activities:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Additional Acknowledgments:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
4.                                      Calculation Agent.
    	
 
    	
Nomura; provided   that all calculations shall be made in good faith and in a commercially   reasonable manner.
    

 

	
5.                                      Account Details.
    
	
 
    
	
(a)
    	
Account for payments to Counterparty:
    
	
 
    	
 
    	
 
    
	
 
    	
Bank:
    	
Capital One Bank
    
	
 
    	
Bank Add.:
    	
424 Madison Avenue
    
	
 
    	
 
    	
New York, NY 10017
    
	
 
    	
ABA#:
    	
065-000-090
    
	
 
    	
Acct No.:
    	
7527921710
    
	
 
    	
Beneficiary:
    	
Ramius LLC
    
	
 
    	
Attn:
    	
Anja Herman, (212) 834-1291
    
	
 
    	
Ref:
    	
Call Spread
    
	
 
    	
 
    	
 
    
	
(b)
    	
Account for payments to Nomura:
    

 

8

 

	
 
    	
Agent Bank Name:
    	
BOA FX TRADING
    
	
 
    	
Agent BIC:
    	
BOFAUS3N
    
	
 
    	
Account Name:
    	
BANK OF AMERICA NY NGFP
    
	
 
    	
Account No/Ref:
    	
6550361610
    
	
 
    	
 
    
	
6.                                      Offices.
    
	
 
    	
 
    
	
(a)
    	
The Office of Counterparty for the Transaction is:   Inapplicable, Counterparty is not a Multibranch Party.
    
	
 
    	
 
    
	
(b)
    	
The Office of Nomura for the Transaction is:   Inapplicable, Nomura is not a Multibranch Party.
    
	
 
    	
 
    
	
7.                                      Notices.
    
	
 
    	
 
    
	
(a)
    	
Address for notices or communications to   Counterparty:
    
	
 
    	
 
    
	
 
    	
Cowen Group, Inc.
    
	
 
    	
599 Lexington Avenue
    
	
 
    	
21st Floor
    
	
 
    	
New York, NY 10022
    
	
 
    	
Facsimile No.:
    	
(212) 845-7999; (212) 201-4840
    
	
 
    	
Attention:
    	
Stephen Lasota, Chief Financial Officer
    
	
 
    	
Telephone No.:
    	
(212) 845-7917
    
	
 
    	
Email:
    	
stephen.lasota@cowen.com
    
	
 
    	
 
    
	
 
    	
With a copy to:
    
	
 
    	
 
    
	
 
    	
Attention:
    	
Owen Littman, General Counsel
    
	
 
    	
Telephone No.:
    	
(724) 773-2270
    
	
 
    	
Email:
    	
owen.littman@cowen.com
    
	
 
    	
 
    
	
(b)
    	
Address for notices or communications to Nomura:
    
	
 
    	
 
    
	
 
    	
Nomura Global Financial Products Inc.
    
	
 
    	
c/o Nomura Securities International, Inc.
    
	
 
    	
Worldwide Plaza
    
	
 
    	
309 West 49th Street
    
	
 
    	
5th Floor
    
	
 
    	
New York, NY 10019
    
	
 
    	
Attention:
    	
Equity Derivatives Operations
    
	
 
    	
Telephone No.:
    	
(212) 667-9580
    
	
 
    	
Facsimile No.:
    	
(646) 587-8638
    
	
 
    	
Email:
    	
EDGUSOps@us.nomura.com
    
	
 
    	
 
    
	
 
    	
With copies to:
    
	
 
    	
 
    
	
 
    	
Attention:
    	
Stephen Roti
    
	
 
    	
Title:
    	
Managing Director, Head of Equity Structuring/Equity   Capital Markets, Americas
    
	
 
    	
Telephone No.:
    	
(212) 436-8182
    
	
 
    	
Facsimile No.:
    	
(646) 587-9334
    
	
 
    	
Email:
    	
stephen.roti@nomura.com
    
	
 
    	
 
    
	
 
    	
Attention:
    	
Raymond Ko
    
	
 
    	
Title:
    	
Executive Director, Head of Corporate Equity   Solutions, Americas
    
	
 
    	
Telephone No.:
    	
(212) 667-2118
    
				

 

9

 

	
 
    	
Facsimile No.:
    	
(646) 587-8638
    
	
 
    	
Email:
    	
raymond.ko@nomura.com
    
	
 
    	
 
    
	
 
    	
Attention:
    	
James Chenard
    
	
 
    	
Title:
    	
Vice President
    
	
 
    	
Telephone No.:
    	
(212) 667-1363
    
	
 
    	
Facsimile No.:
    	
(646) 587-8740
    
	
 
    	
Email:
    	
james.chenard@nomura.com
    

 

8.                                      Representations and Warranties of Counterparty.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)                                  [Reserved]

 

10

 

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

 

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

 

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

 

9.                                      Other Provisions.

 

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

 

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

 

11

 

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

 

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

 

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

 

(e)                                  Transfer or Assignment.

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

(g)                                  Additional Termination Events.

 

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

 

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

 

14

 

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

 

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

 

(h)                                 Amendments to Equity Definitions.

 

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

 

15

 

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

 

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

 

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

 

16

 

	
Share Termination Alternative:
    	
 
    	
If applicable, Nomura shall deliver to Counterparty   the Share Termination Delivery Property on, or within a commercially   reasonable period of time after, the date when the relevant Payment   Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of   the Equity Definitions or Section 6(d)(ii) and 6(e) of the   Agreement, as applicable (the “Share Termination   Payment Date”), in satisfaction of such Payment Obligation in the   manner reasonably requested by Counterparty free of payment.
    
	
 
    	
 
    	
 
    
	
Share Termination Delivery Property:
    	
 
    	
A number of Share Termination Delivery Units, as   calculated by the Calculation Agent, equal to the Payment Obligation divided   by the Share Termination Unit Price. The Calculation Agent shall adjust the   Share Termination Delivery Property by replacing any fractional portion of a   security therein with an amount of cash equal to the value of such fractional   security based on the values used to calculate the Share Termination Unit   Price.
    
	
 
    	
 
    	
 
    
	
Share Termination Unit Price:
    	
 
    	
The value to Nomura of property contained in one   Share Termination Delivery Unit, as determined by the Calculation Agent in   its discretion by commercially reasonable means and notified by the   Calculation Agent to Nomura at the time of notification of the Payment   Obligation. For the avoidance of doubt, the parties agree that in determining   the Share Termination Delivery Unit Price the Calculation Agent may consider   the purchase price paid in connection with the purchase of Share Termination   Delivery Property.
    
	
 
    	
 
    	
 
    
	
Share Termination Delivery Unit:
    	
 
    	
One Share or, if the Shares have changed into cash   or any other property or the right to receive cash or any other property as   the result of a Nationalization, Insolvency or Merger Event (any such   cash or other property, the “Exchange Property”),   a unit consisting of the type and amount of such Exchange Property received   by a holder of one Share (without consideration of any requirement to pay   cash or other consideration in lieu of fractional amounts of any securities)   in such Nationalization, Insolvency or Merger Event, as determined by   the Calculation Agent.
    
	
 
    	
 
    	
 
    
	
Failure to Deliver:
    	
 
    	
Applicable
    
	
 
    	
 
    	
 
    
	
Other applicable provisions:
    	
 
    	
If Share Termination Alternative is applicable, the   provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions   and the provisions set forth opposite the caption “Representation and   Agreement” in Section 2 will be applicable, except that all references   in such provisions to “Physically-settled” shall be read as references to   “Share Termination Settled” and all references to “Shares”
    

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

(u)                                 Matters relating to Nomura and the Agent.

 

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

 

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

 

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

 

20

 

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

 

	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Nomura Global Financial Products   Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas Bailey
    
	
 
    	
Authorized Signatory
    
	
 
    	
Name: Thomas Bailey
    

 

Accepted and confirmed
 as of the Trade Date:

 

	
Cowen Group, Inc.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Peter A. Cohen
    	
 
    
	
Authorized Signatory
    	
 
    
	
Name: Peter A. CohenExhibit 10.2

 

EXECUTION VERSION

 

 

Nomura Global Financial Products Inc.

c/o Nomura Securities International, Inc.

Worldwide Plaza

309 West 49th Street

5th Floor

New York, NY 10019

 

	
 
    	
March 5,   2014
    

 

	
To:
    	
Cowen   Group, Inc.
    
	
 
    	
599   Lexington Avenue
    
	
 
    	
21st   Floor
    
	
 
    	
New   York, NY 10022
    
	
 
    	
Facsimile   No.:
    	
(212)   845-7999; (212) 201-4840
    
	
 
    	
Attention:
    	
Stephen   Lasota, Chief Financial Officer
    
	
 
    	
Telephone   No.:
    	
(212)   845-7917
    

 

Re:                             Amendment to Call Option Transaction

 

This letter agreement (this “Amendment”) amends the terms and conditions of the transaction (the “Transaction”) evidenced by the letter agreement re: Call Option Transaction between Nomura Global Financial Products Inc. (“Nomura”) and Cowen Group, Inc. (“Counterparty”) dated as of March 4, 2014 (the “Confirmation”).  Solely for the purpose of this Amendment, other than Section 2 below, “Trade Date” means March 5, 2014.

 

1.                                      Definitions.  Capitalized terms used herein without definition shall have the meanings assigned to them in the Confirmation.

 

2.                                      Representations and Warranties of Counterparty.        Each of the representations and warranties made pursuant to the Agreement and the Confirmation on the Trade Date and/or the Premium Payment Date are hereby deemed to be repeated on the date hereof and/or on the Premium Payment Date, as the case may be, as if:

 

(a)                                 References in the Confirmation to “the Trade Date” and “the date hereof” and the reference in the Agreement to “each date on which a Transaction is entered into”, in each case, were references to the date hereof;

 

(b)                                 References in the Agreement to “this Agreement” (1) in the context of execution and delivery thereof, were references to this Amendment and (2) in all other contexts, were references to the Agreement, as supplemented by the Confirmation, as amended by this Amendment; and

 

(c)                                  References in the Confirmation (1) to “the Transaction” were references to the Transaction, as the terms thereof are amended by this Amendment and (2) to “this Confirmation” (or related references, such as “hereunder” or “hereby”) (x) in the context of execution and delivery thereof, were references to this Amendment and (y) in all other contexts, were references to the Confirmation as amended by this Amendment.

 

3.                                      Amendments.  The Confirmation is hereby amended as follows:

 

(a)                                 The number “130,000” opposite the caption “Number of Options” in Section 2 of the Confirmation is hereby replaced with the number 149,500.

 

(b)                                 The figure “USD 31,052,408.93” opposite the caption “Premium” in Section 2 of the Confirmation is hereby replaced with the figure USD 35,710,270.27.

 

 

4.                                      Opinions.  Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Premium Payment Date, in a form reasonably satisfactory to Dealer.  In respect of obligations under the Confirmation as amended by this Amendment, delivery of such opinion to Dealer shall be a condition precedent for the purpose of Section 2(a)(iii) of the Agreement with respect to each such obligation of Dealer under Section 2(a)(i) of the Agreement.

 

5.                                      Effectiveness.  Subject to the immediately succeeding sentence, this Amendment shall become effective upon execution hereof by the parties hereto.  In the event that the sale of “Additional Securities” (as such term is defined in the Purchase Agreement) is not consummated by Counterparty and the Initial Purchasers for any reason, or Counterparty fails to deliver the opinion of counsel as required under Section 4 above, in each case by 5:00 p.m. on the Premium Payment Date, or such later date as agreed by the parties (the Premium Payment Date or such later date, the “Amendment Early Unwind Date”), the amendments in Section 3 hereof shall be null and void, and, subject to Section 9(s) of the Confirmation, the Transaction shall remain and continue in full force and effect as if this Amendment had not been entered into; provided that Counterparty shall purchase from Dealer on the Amendment Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates on account of the increase in the Number of Options pursuant to Section 3(a) hereof at the then prevailing market price.  Subject to the immediately preceding sentence, all references in the Confirmation to “the Transaction” are deemed to be references to the Transaction as amended hereby, and all references to “the Confirmation” are deemed to be references to the Confirmation as amended hereby.  Except as amended hereby, all the terms of the Transaction and provisions in the Confirmation shall remain and continue in full force and effect and are hereby confirmed in all respects.

 

6.                                      Counterparts.  This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all of the signatures thereto and hereto were upon the same instrument.

 

7.                                      Governing Law.  The provisions of this Amendment shall be governed by the laws of the State of New York law (without reference to choice of law doctrine).

 

 

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

 

	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Nomura Global Financial Products   Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas Bailey
    
	
 
    	
Authorized Signatory
    
	
 
    	
Name: Thomas Bailey
    

 

Accepted and confirmed
 as of the Trade Date:

 

	
Cowen   Group, Inc.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Peter A. Cohen
    	
 
    
	
Authorized Signatory
    	
 
    
	
Name: Peter A. Cohen

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00227-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00227-of-00352.parquet"}]]