Jefferies International Limited Vintners Place London EC4V 3BJ England
Exhibit 10.1
▇▇▇▇▇▇▇▇▇ International Limited
Vintners Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
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June 17, 2014
To: | EZCORP, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: Chief Financial Officer Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ |
Ref No.: OTC-US-30075
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the call option transaction entered into between ▇▇▇▇▇▇▇▇▇ International Limited (“Dealer”) and EZCORP, 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 June 17, 2014 (the “Offering Memorandum”) relating to the 2.125% 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 200,000,000 (as increased by up to an aggregate principal amount of USD 30,000,000 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 June 23, 2014 between Counterparty and ▇▇▇▇▇ Fargo Bank, National Association, as trustee (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, in each case, 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 Dealer 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, any such amendment or supplement (other than any amendment or supplement (i) pursuant to Section 10.01(g) of the Indenture that, as determined by the Calculation Agent, conforms the Indenture to the description of the Convertible Notes in the Offering Memorandum or (ii) subject to “Consequences of Merger Events/Tender Offers,” pursuant to Section 10.01(h) or 10.01(b) of the Indenture) 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 Dealer 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 Dealer and Counterparty had executed an agreement in such form (but without any Schedule except for (x) 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, (y) the designation of Dealer’s ultimate parent as a Credit Support Provider and the guarantee in the form of Annex A hereto as a Credit Support Document and (z) the election that the provisions of Section 5(a)(vi) of the Agreement shall apply to Dealer with a “Threshold Amount” of 3% of Dealer’s stockholders’ equity on the Trade Date, provided that the following language shall be added to the end of such Section 5(a)(vi): “Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event of Default if (i) the default was caused solely by error or omission of an administrative or operational nature; (ii) funds were available to enable the party to make the payment when due; and (iii) the payment is made within two Local Business Days of such party’s receipt of written notice of its failure to pay.” 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. This Transaction shall be considered a “Share Option Transaction” for purposes of the Equity Definitions. The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms.
Trade Date: | June 17, 2014 |
Option Style: | “Modified American”, as described under “Procedures for Modified American Exercise” below |
Option Type: | Call |
Buyer: | Counterparty |
Seller: | Dealer |
Shares: | The Class A Non-voting Common Stock of Counterparty, par value USD 0.01 per share (Exchange symbol “EZPW”) |
Number of Options: | 200,000. 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. |
Applicable Percentage: | 22.5% |
Option Entitlement: | Initially, a number equal to the product of the Applicable Percentage and 62.2471. |
Strike Price: | Initially, USD 16.065 |
For the avoidance of doubt, the Option Entitlement and Strike Price shall be subject to adjustment, from time to time, upon the occurrence of any Potential Adjustment Event as set forth under “Method of Adjustment” below.
Premium: | USD 9,088,835.10 |
Premium Payment Date: | June 23, 2014 |
Exchange: | The NASDAQ Global Select Market |
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Related Exchange(s): | All Exchanges |
Excluded Provisions: | Section 4.03 and Section 4.04(g) of the Indenture. |
Procedures for Modified American 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 4.02 of the Indenture; provided that if Counterparty has not delivered to Dealer a related Notice of Exercise, then 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 surrender of a Convertible Note for conversion in respect of which Counterparty has elected to designate a financial institution for exchange in lieu of conversion of such Convertible Note pursuant to Section 4.10 of the Indenture. Options may only be exercised hereunder on a Conversion Date in respect of the Convertible Notes and only in an amount equal to the number of $1,000 principal amount of Convertible Notes converted on such Conversion Date. |
Free Convertibility Date: | December 15, 2018 |
Expiration Time: | The Valuation Time |
Expiration Date: | June 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, 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 Dealer 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 on any Conversion Date, Counterparty must notify Dealer 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 the number of $1,000 principal amount of Notes being converted on such Conversion Date) and (ii) the scheduled first day of the Settlement Averaging Period and the scheduled Settlement Date; provided that in respect of any Options relating to |
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Convertible Notes with a Conversion Date occurring on or after the Free Convertibility Date, such notice may be given at any time before 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the Expiration Date and need only specify the number of such Options (and the number of $1,000 principal amount of Notes being converted on such Conversion Date).
Notwithstanding the foregoing, such notice (and the related exercise of Options) shall be effective if given after the relevant deadline for such notice, but prior to 5:00 p.m. (New York City time) on the fifth Exchange Business Day following the date of such deadline, in which case the Calculation Agent shall have the right to adjust the Option Cash Settlement Amount as appropriate to reflect the additional costs (including, but not limited to, hedging mismatches and market losses) and expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) as a result of Dealer not having received such notice on or prior to the relevant deadline.
Valuation Time: | The close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Valuation Time shall be accordingly extended to the extent reported transactions in the Shares are used to compute Relevant Price. |
Market Disruption Event: | Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following: |
“‘Market Disruption Event’ means (i) a failure by the Relevant Stock Exchange 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 on the Relevant Stock Exchange or in any options contracts or futures contracts relating to the Shares.”
Relevant Stock Exchange: | The Exchange, or if the Shares are not then listed on the Exchange, the principal other U.S. national or regional securities exchange on which the Shares are then listed. |
Settlement Terms.
Settlement Method: | Cash Settlement. |
Cash Settlement: | In lieu of Section 8.1 of the Equity Definitions, Dealer 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. |
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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 in no event shall the Option Cash Settlement Amount for any Option exceed the Applicable Limit for such Option; provided further that if the calculation contained in clause (y) above results in a negative number, such number shall be replaced with the number “zero”. |
Applicable Limit: | For any Option, an amount of cash equal to the Applicable Percentage multiplied by the excess of (i) the amount of cash, if any, delivered to the Holder (as defined in the Indenture) of the related Convertible Note upon conversion of such Convertible Note, over (ii) USD 1,000. |
Valid Day: | A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Relevant Stock Exchange or, if the Shares are not then listed on any U.S. 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 Relevant Stock Exchange. If the Shares are not listed or admitted for trading on any U.S. national or regional securities exchange, “Scheduled Valid Day” means a Business Day. |
Business Day: | Any day other than a Saturday, a Sunday or other day on which banking institutions in New York State are authorized or required by law to close. |
Relevant Price: | On any Valid Day, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “EZPW <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading of the Exchange to the Scheduled Closing Time of the Exchange 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 determined by the Calculation Agent using a volume-weighted average method, if practicable). 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: |
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(i) | if the related Conversion Date occurs prior to the Free Convertibility Date, the 80 consecutive Valid Day period beginning on, and including, the third Valid Day after such Conversion Date; or |
(ii) | if the related Conversion Date occurs on or after the Free Convertibility Date, the 80 consecutive Valid Day period beginning on, and including, the 82nd Scheduled Valid Day immediately preceding 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” 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, Dealer 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 (as such term is defined in the Indenture) of the Convertible Notes (upon conversion or otherwise) or (y) any other transaction in which Holders (as such term is defined in the Indenture) 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 4.04(c) of the Indenture or the fourth sentence of Section 4.04(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 in respect of any adjustment under the Indenture 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, notwithstanding the foregoing, if the Calculation Agent 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 4.05 of the Indenture or any supplemental indenture entered |
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into pursuant to Section 10.01(h) of the Indenture or in connection with any proportional adjustment or the determination of the fair value of any securities, property, rights or other assets), then 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.
Dilution Adjustment Provisions: | Sections 4.04(a), (b), (c), (d) and (e) and Section 4.05 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 “Specified Transaction” in Section 4.06 of the Indenture. |
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 4.04(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; 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, notwithstanding the foregoing, if the Calculation Agent 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 10.01(h) of the Indenture), then the Calculation Agent will determine the adjustment to be made to any one or more of the nature of the Shares, Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; 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 Dealer, in its sole discretion, may elect for Cancellation and Payment (Calculation Agent Determination) to apply. |
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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 (i) Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof with the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute),” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions”. |
Failure to Deliver: | Not 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: | Not Applicable |
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Hedging Party: | For all applicable Additional Disruption Events, Dealer. |
Additional Termination Event: | Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, the Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with the Transaction (or terminated portion thereof) being the Affected Transaction and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction. |
Determining Party: | For all applicable Extraordinary Events, Calculation Agent. |
Non-Reliance: Applicable
Agreements and Acknowledgments
Regarding Hedging Activities: Applicable
Regarding Hedging Activities: Applicable
Additional Acknowledgments: Applicable
4. | Calculation Agent. Dealer; provided that following the occurrence and during the continuance of an Event of Default pursuant to Section 5(a)(vii) of the Agreement with respect to which Dealer is the sole Defaulting Party, Counterparty shall have the right to designate a nationally recognized third-party dealer in over-the-counter equity derivatives to replace Dealer as Calculation Agent. All calculations and determinations by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. In the event the Calculation Agent makes any determination or calculations pursuant to this Confirmation, the Agreement or the Equity Definitions, promptly following receipt of a written request from Counterparty, the Calculation Agent shall provide an explanation in reasonable detail of the basis for such determination or calculation and shall, to the extent permitted by applicable law, discuss and attempt to reconcile any dispute with Counterparty, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models or confidential information used by it for such determination or calculation. |
5. Account Details.
(a) | Account for payments to Counterparty: |
Bank: | ▇▇▇▇▇ Fargo Bank, NA | |
ABA#: | ▇▇▇▇▇▇▇▇▇ | |
Acct Name: | Texas EZPawn, LP | |
Acct No.: | ____________ | |
Contact: | ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
Phone No.: | ▇▇▇-▇▇▇-▇▇▇▇ | |
(b) | Account for payments to Dealer: |
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Bank: | Bank of New York | |
ABA#: | ▇▇▇▇▇▇▇▇▇ | |
A/C: | ▇▇▇▇▇▇▇▇▇ LLC | |
A/C: | ____________ | |
FFC Equity Derivatives | ||
6. Offices.
(a) | The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party. |
(b) | The Office of Dealer for the Transaction is: Inapplicable, Dealer is not a Multibranch Party. |
7. Notices.
(a) Address for notices or communications to Counterparty:
To: | EZCORP, Inc. | |
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ | ||
Attention: | Chief Financial Officer | |
Telephone: | (▇▇▇) ▇▇▇-▇▇▇▇ | |
Email: | ▇▇▇▇_▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇ | |
(b) Address for notices or communications to Dealer:
To: | ▇▇▇▇▇▇▇▇▇ International Limited | |
c/o Jefferies LLC | ||
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ | ||
Attention: | ▇▇▇▇▇ ▇▇▇▇▇▇ | |
Telephone: | ▇▇ ▇▇▇-▇▇▇-▇▇▇▇ | |
Fax: | ▇▇ ▇▇▇-▇▇▇-▇▇▇▇ | |
Email: | ▇▇▇▇▇▇▇_▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ | |
With copies to: | ||
Jefferies International Limited | ||
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ | ||
Attention: | ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
Telephone: | ▇▇ ▇▇▇-▇▇▇-▇▇▇▇ | |
Email: | ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ | |
and | ||
Jefferies LLC | ||
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ | ||
Attention: | ▇▇▇▇▇ ▇▇▇, General Council - Sales & Trading | |
Telephone: | ▇▇ ▇▇▇-▇▇▇-▇▇▇▇ | |
Fax: | ▇▇ ▇▇▇-▇▇▇-▇▇▇▇ | |
Email: | ▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ | |
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8. Representations and Warranties of Counterparty.
Counterparty hereby represents and warrants to Dealer 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 filed as an exhibit to Counterparty’s Annual Report on Form 10-K for the year ended December 31, 2013, as updated by any subsequent filings, 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. |
(f) | Counterparty is not, on the date hereof, in possession of any material non-public information with respect to Counterparty or the Shares. |
(g) | No state or local (including any non-U.S. jurisdiction’s) law, rule, regulation or regulatory order applicable to the Shares as a result of the nature of Issuer’s business would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares. |
(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. |
9. Other Provisions.
(a) | Opinions. Counterparty shall deliver to Dealer, on the Premium Payment Date, an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) (other than to the |
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validity, binding effect and enforceability of the Transaction) through (c) of this Confirmation. 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 obligation of Dealer under Section 2(a)(i) of the Agreement.
(b) | Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares or consummates or otherwise executes or engages in any transaction or event (a “Conversion Rate Adjustment Event”) that would lead to an increase in the Conversion Rate (as such term is defined in the Indenture), promptly give Dealer a written notice of such repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if following such repurchase or Conversion Rate Adjustment Event, as the case may be, the number of outstanding Shares as determined on such day is (i) less than 52.3 million (in the case of the first such notice) or (ii) thereafter more than 1.9 million less than the number of Shares included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Dealer 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, without limitation, losses relating to Dealer’s hedging activities with respect to the Transaction as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including 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 Dealer 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 Dealer 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 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. Assuming Dealer is not, on the date hereof, in possession of any material non-public information with respect to Counterparty or the Shares and will establish a commercially |
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reasonable Hedge Position, 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 Dealer 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(q) 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 (the “Code”)); |
(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 Dealer, will not expose Dealer 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 Dealer; |
(D) | Dealer 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 Dealer 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; |
(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 Dealer to permit Dealer 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 Dealer in connection with such transfer or assignment. |
(ii) | Dealer may, (A), without Counterparty’s consent, transfer or assign all or any part of its rights or obligations under the Transaction to any affiliate of Dealer whose obligations hereunder will be guaranteed, pursuant to the terms of the Credit Support Document, provided that (I) no Potential Event of Default, Event of Default or Additional Termination Event in respect of Dealer or the guarantor shall result from such transfer or assignment, (II) Counterparty will not be required, as a result of such transfer or assignment, to pay the transferee or assignee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than the amount, if any, that Counterparty would have been required to pay Dealer in the absence of such transfer or assignment, and (III) the transferee or assignee shall provide Counterparty with a complete and accurate U.S. Internal Revenue Service Form W-9 or W-8 (as applicable) prior to becoming a party to the Transaction, or (B) with Counterparty’s consent, not to be unreasonably withheld, to any Substitute Dealer (or affiliate |
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thereof) with a rating (or having a guarantor with a rating) for its long term, unsecured and unsubordinated indebtedness equal to or better than the lesser of (1) the credit rating of Credit Support Provider at the time of the transfer and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor (“S&P”), or A3 by ▇▇▇▇▇’▇ Investor Service, Inc. (“Moody’s”) or, if either S&P 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 Dealer. If at any time at which (A) the Section 16 Percentage exceeds 7.5% or (B) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A) or (B), an “Excess Ownership Position”), Dealer 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 Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer 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 Dealer 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. The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer and each “group” of which Dealer is a member or may be deemed a member, in each case, 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 “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer 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 Dealer in its reasonable 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 (other than reporting obligations under Section 13(d) of the Exchange Act) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. “Substitute Dealer” means a nationally recognized banking or broker-dealer financial institution with experience in over-the-counter corporate equity derivatives.
(iii) | Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities, or make or receive any payment in cash, to or from Counterparty, Dealer 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 Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer 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 ▇▇▇▇▇▇▇▇▇ Group LLC, the parent of Dealer, is rated Ba1 or lower by Moody’s or BB+ or lower by S&P (any such rating, a “Ratings Downgrade”), then Counterparty may, at any time following the occurrence and during the continuation of such Ratings Downgrade, provide written notice to Dealer specifying that it elects for this Section 9(f) to apply (a “Trigger Notice”). Upon receipt by Dealer of a Trigger Notice from Counterparty, Dealer shall promptly elect that either (i) the parties shall negotiate in |
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good faith terms for collateral arrangements pursuant to which Dealer is required to provide collateral (including, but not limited to, cash, short-term U.S. Treasury obligations, equity or equity-linked securities issued by Counterparty) to Counterparty in respect of the Transaction with a value equal to the full ▇▇▇▇-to-market exposure of Counterparty under the Transaction, as determined by Dealer, or (ii) 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, and (B) the Transaction shall be the sole Affected Transaction. The Calculation Agent will calculate any payment made in respect of the Additional Termination Event.
(g) | Role of Agent. ▇▇▇▇▇▇▇▇▇ LLC (“Jefferies”) is acting as agent for both parties but does not guarantee the performance of either party. (i) Neither Dealer nor Counterparty shall contact the other with respect to any matter relating to the Transaction without the direct involvement of Jefferies; (ii) Jefferies, Dealer and Counterparty each hereby acknowledges that any transactions by Dealer or Jefferies with respect to Shares will be undertaken by Dealer as principal for its own account; (iii) all of the actions to be taken by Dealer and Jefferies in connection with the Transaction shall be taken by Dealer or Jefferies independently and without any advance or subsequent consultation with Counterparty; and (iv) Jefferies is hereby authorized to act as agent for Counterparty only to the extent required to satisfy the requirements of Rule 15a-6 under the Exchange Act in respect of the Transaction. |
(h) | 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 7.01 of the Indenture and the Convertible Notes are accelerated, then such event 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) Dealer 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 Dealer from Counterparty, within the applicable time period set forth opposite “Notice of Exercise” in Section 2, of any Notice of Exercise in respect of Options that relate to Convertible Notes as to which additional Shares would be added to the Conversion Rate (as defined in the Indenture) pursuant to Section 4.03 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(h)(ii). Upon receipt of any such Notice of Exercise, Dealer 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 the 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 Dealer 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 (the “Make-Whole Unwind Payment”) 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 the 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 Conversion Rate (as defined in the Indenture) pursuant to Section 4.03 of the Indenture); provided that the amount of cash payable in respect of such early termination by Dealer to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (I) (1) the |
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number of Make-Whole Conversion Options, multiplied by (2) the Conversion Rate (as defined in the Indenture, and after taking into account any applicable adjustments to the Conversion Rate pursuant to Section 4.03 of the Indenture), multiplied by (3) a market price per Share determined by the Calculation Agent over (II) the aggregate principal amount of such Convertible Notes, as determined by the Calculation Agent. The Calculation Agent will calculate any payment made in respect of the Additional Termination Event.
(iii) | In the event of a repurchase or any reacquisition of the Convertible Notes by Counterparty (for any reason, including as a result of the occurrence of a “Fundamental Change” as provided in Section 3.02 of the Indenture), Counterparty may request a termination of a number of Options underlying the repurchased Convertible Notes on a mutually agreed date that is commercially practical for such termination to occur. Dealer shall promptly consult with Counterparty as to the timing and pricing of any such termination. To the extent the parties cannot so agree, Counterparty shall have the right to designate an Additional Termination Event with respect to all or a portion of a number of Options corresponding to the number of Convertible Notes (in principal amount of $1,000) being repurchased or reacquired 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) Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement. The Calculation Agent will calculate any payment made in respect of the Additional Termination Event. |
(i) | Amendments to Equity Definitions. |
(i) | Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with “notice to Counterparty” in the first sentence of such section. |
(j) | No Setoff. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. |
(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 Dealer based on the advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act on account of (x) any termination or cancellation, in whole or in part, of the Transaction or (y) any adoption, promulgation or effectiveness of, or change in, applicable law, rules, regulations, formal or informal interpretation thereof following the Trade Date, Counterparty shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered underwritten offering; provided, however, that if Dealer, 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 Dealer 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 Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that |
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are necessary, in its reasonable judgment, to compensate Dealer 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 Dealer at the Relevant Price on such Exchange Business Days, and in such amounts, requested by Dealer.
(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. Dealer 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 Dealer, with respect to some or all of the Options hereunder, if Dealer determines that such action is reasonably necessary to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect transactions in Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements (consistently applied across all counterparties), or with related policies and procedures applicable to Dealer. |
(o) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Counterparty with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction other than during any such bankruptcy proceedings; provided further that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. |
(p) | 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. |
(q) | 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 Dealer written notice of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such Merger Event (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 Dealer written notice of the details of such adjustment. |
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(r) | 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)). |
(s) | Agreements and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges and agrees that: (A) at any time on and prior to the Expiration Date, Dealer 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) Dealer 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) Dealer 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 Dealer 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. |
(t) | 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 Dealer opinions of counsel as required pursuant to Section 9(a), in each case by 1:00 p.m. (New York City time) on the Premium Payment Date, or such later date as agreed upon by the parties (the Premium Payment 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 Dealer 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 Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the price Dealer or any such affiliate paid for such Shares. Each of Dealer and Counterparty represents and acknowledges to the other that, subject to the proviso included in this Section 9(t), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. |
(u) | Payment by Counterparty. In the event that, following payment of the Premium, (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 Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer, 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. |
(v) | FATCA: Withholding Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Tax” as used in Part 2(a) of the Schedule (Payer Tax Representations) and “Indemnifiable Tax” as defined in Section 14 of the Agreement shall not include any U.S. federal withholding tax imposed or collected pursuant to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a “FATCA Withholding Tax”). For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of this Agreement. |
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(w) | Transaction Reporting – Consent for Disclosure of Information. Notwithstanding anything to the contrary in this Confirmation or any non-disclosure, confidentiality or other agreements entered into between the parties from time to time, each party hereby consents to the Disclosure of information (the “Reporting Consent”): |
(i) | to the extent required by, or required in order to comply with, any applicable law, rule or regulation which mandates Disclosure of transaction and similar information or to the extent required by, or required in order to comply with, any order, request or directive regarding Disclosure of transaction and similar information issued by any relevant authority or body or agency having competent jurisdiction over a party hereto (“Reporting Requirements”); or |
(ii) | to and between the other party’s head office, branches or affiliates; or to any trade data repository or any systems or services operated by any trade repository or Market, in each case, in connection with such Reporting Requirements. |
Disclosure” means disclosure, reporting, retention, or any action similar or analogous to any of the aforementioned.
Disclosures made pursuant to this Reporting Consent may include, without limitation, Disclosure of information relating to disputes over transactions between the parties, a party’s identity, and certain transaction and pricing data and may result in such information becoming available to the public or recipients in a jurisdiction which may have a different level of protection for personal data from that of the relevant party’s home jurisdiction.
This Reporting Consent shall be deemed to constitute an agreement between the parties with respect to Disclosure in general and shall survive the termination of the Transaction. No amendment to or termination of this Reporting Consent shall be effective unless such amendment or termination is made in writing between the parties and specifically refers to this Reporting Consent. EMIR Portfolio Reconciliation and Dispute Resolution:
Subject to the below, the parties hereby agree that the provisions set out in Part I and III of the Attachment to the ISDA 2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol as published by the International Swaps and Derivatives Association on 19 July 2013 shall be incorporated by reference to this Confirmation, mutatis mutandis, as though such provisions and definitions were set out in full herein, with any such conforming changes as are necessary to deal with what would otherwise be inappropriate or incorrect cross-references:
(iii) | References therein to: |
(A) | the “Adherence Letter” shall be deemed to be references to this Confirmation; |
(B) | the “Implementation Date” shall be deemed to be references to the date of this Agreement; |
(C) | the “Protocol Covered Agreement” shall be deemed to be this Confirmation; and |
(D) | the “Protocol” shall be deleted |
(iv) | For the purposes of the foregoing: |
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(A) | Portfolio reconciliation process status: |
Dealer shall be a Portfolio Data Sending Entity
Counterparty shall be a Portfolio Data Receiving Entity
(B) | Local Business Days: |
Dealer specifies the following places for the purpose of the definition of Local Business Day as it applies to it: London, New York
Counterparty specifies the following place(s) for the purposes of the definition of Local Business Day as it applies to it: Austin, Texas
(C) | Contact details for Dispute Notices, Portfolio Data, and discrepancy notices: |
Notices to Dealer:
The following items may be delivered to Dealer at the contact details shown below:
Portfolio Data:
Jefferies LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ 1022
Attn: Equity Derivatives Middle Office
E-mail: ▇▇▇▇▇▇▇_▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
And
▇▇▇▇▇▇▇▇▇ International Limited
Vintners Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Attn: Equity Derivatives Middle Office
E-mail: ▇▇▇▇▇▇▇▇▇▇_▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
Notice of a discrepancy:
Jefferies LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ 1022
Attn: Equity Derivatives Middle Office
E-mail: ▇▇▇▇▇▇▇_▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
And
▇▇▇▇▇▇▇▇▇ International Limited
Vintners Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Attn: Equity Derivatives Middle Office
E-mail: ▇▇▇▇▇▇▇▇▇▇_▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
Dispute Notice:
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Jefferies LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ 1022
Attn: Equity Derivatives Middle Office
E-mail: ▇▇▇▇▇▇▇_▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
And
Jefferies International Limited
Vintners Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Attn: Equity Derivatives Middle Office
E-mail: ▇▇▇▇▇▇▇▇▇▇_▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
Notices to Counterparty:
The following items may be delivered to Counterparty at the contact details shown below:
Portfolio Data:
EZCORP, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
E-mail: ▇▇▇▇_▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Notice of a discrepancy:
EZCORP, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
E-mail: ▇▇▇▇_▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Dispute Notice:
EZCORP, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
E-mail: ▇▇▇▇_▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
(D) | Use of a third-party service provider: |
(I) Dealer may appoint a third party as its agent and/or third party service provider for the purposes of performing all or part of the actions required by the Portfolio Reconciliation Risk Mitigation Techniques; and
(II) Counterparty may appoint a third party as its agent and/or third party service provider for the purposes of performing all or part of the actions required by the Portfolio Reconciliation Risk Mitigation Techniques.
Notwithstanding anything to the contrary as set out herein, the provisions of this section “EMIR Portfolio Reconciliation and Dispute Resolution” shall survive the termination of the Transaction. No amendment to or termination of this section shall be effective unless such amendment or
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termination is made in writing between the parties and specifically refers to this section “EMIR Portfolio Reconciliation and Dispute Resolution”.
(x) | EMIR Classification and NFC Representation: The section entitled “NFC Representation” as set out in the Attachment to the ISDA 2013 EMIR NFC Representation Protocol as published by the International Swaps and Derivatives Association on 8 March 2013 (the “EMIR Classification Protocol”) shall be incorporated by reference to this Confirmation but with the following amendments: |
(i) | References to a party adhering, a party’s adherence or a party having adhered to the EMIR Classification Protocol as a “party making the NFC Representation” will be construed as Counterparty executing this Confirmation while making the statement that it is a party which is making the NFC Representation. |
References to “party which is a NFC+ Party making the NFC Representation” shall not be applicable to this Confirmation.
(ii) | Dealer confirms that it is a party that does not make the NFC Representation. |
Counterparty confirms that it is a party making the NFC Representation.
(iii) | Unless otherwise specified by the relevant party, for the purposes of the definition of “effectively delivered”: |
Dealer’s address details to which any Clearing Status Notice, Non-Clearing Status Notice, NFC+ Representation Notice, NFC Representation Notice or Non-representation Notice should be delivered are: ▇▇▇▇▇▇▇_▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇▇▇_▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇.
(iv) | Counterparty’s address details to which any Clearing Status Notice, Non-Clearing Status Notice, NFC+ Representation Notice, NFC Representation Notice or Non-representation Notice should be delivered are: EZCORP, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attn: Chief Financial Officer, E-mail: ▇▇▇▇_▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇. |
(v) | The definition of: |
(A) | “Adherence Letter” is deleted; |
(B) | “effectively delivered” is amended by replacing the words “the Adherence Letter” with the words “this Confirmation”; and |
(C) | “Protocol” is deleted. |
(y) | Tax Representations. |
(i) | Part 2(b) of the ISDA Schedule – Payee Representation: |
For the purpose of Section 3(f) of the Agreement, Counterparty makes the following representation to Dealer:
Counterparty is a corporation established under the laws of the State of Delaware and is a U.S. person (as that term is defined in Section 7701(a)(30) of the Code).
For the purpose of Section 3(f) of the Agreement, Dealer makes the following representation to Counterparty:
It is a “foreign person” (as that term is used in Section 1.6041-4(a)(4) of the United States Treasury Regulations) for United States federal income tax purposes.
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(ii) | Part 3(a) of the ISDA Schedule – Tax Forms: |
Party Required to Deliver Document
Form/Document/Certificate | Date by which to be Delivered | |
Counterparty | A complete and duly executed United States Internal Revenue Service Form W-9 (or successor thereto.) | (i) Upon execution and delivery of this Confirmation; (ii) promptly upon reasonable demand by Dealer; and (iii) promptly upon learning that any such Form previously provided by Counterparty has become obsolete or incorrect. |
Dealer | A complete and duly executed United States Internal Revenue Service Form W-8BEN (or successor thereto.) | (i) Upon execution and delivery of this Confirmation; (ii) promptly upon reasonable demand by Counterparty; and (iii) promptly upon learning that any such Form previously provided by Dealer has become obsolete or incorrect. |
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Please confirm that the foregoing correctly sets forth the terms of the agreement between Dealer and Counterparty with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and returning an executed copy to Dealer.
Yours faithfully,
▇▇▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ||
Name: | ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ||
Title: | COO Equites EMEA | ||
▇▇▇▇▇▇▇▇▇ LLC
as Agent
as Agent
By: | /s/ ▇▇▇▇ ▇▇▇▇▇▇ | ||
Name: | ▇▇▇▇ ▇▇▇▇▇▇ | ||
Title: | COO US Equities | ||
Accepted and confirmed
as of the Trade Date:
as of the Trade Date:
EZCORP, INC. | |
By: | /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ |
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Title: Executive Vice President and Chief Financial Officer | |
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Annex A – Form of Guarantee
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