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As filed with the Securities and Exchange Commission on December 14, 2009.

Registration No. 333-163372



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Amendment No. 2
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



COWEN GROUP, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  6211
(Primary Standard Industrial
Classification Code Number)
  27-0423711
(I.R.S. Employer
Identification No.)

599 Lexington Avenue
New York, New York 10022
(212) 845-7900
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

J. Kevin McCarthy
General Counsel
Cowen Group, Inc.
599 Lexington Avenue
New York, New York 10022
(212) 845-7900
(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:
David K. Boston, Esq.
Laura L. Delanoy, Esq.
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
(212) 728-8000
  Michael T. Kohler, Esq.
Bartholomew A. Sheehan, III, Esq.
Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
(212) 839-5300



Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.



        If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box.    o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.





Explanatory Note

        This Amendment No. 2 to the Registration Statement on Form S-1 (File No. 333-163372) of Cowen Group, Inc. is being filed solely to amend Items 13 and 16(a) of Part II thereof and to file certain exhibits thereto. This Amendment No. 2 does not modify any provisions of the Prospectus constituting Part I or Items 14, 15 or 17 of Part II of the Registration Statement. Accordingly, the Prospectus and those Items of Part II have not been included in this Amendment No. 2.



PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.    Other Expenses of Issuance and Distribution

        The following table sets forth the costs and expenses, other than the underwriting discounts and commissions, payable by us in connection with the sale of Class A common stock being registered. All amounts shown are estimates, except the SEC registration fee and the FINRA filing fee.

Item
  Amount to Be Paid

SEC Registration Fee

  $6,368

FINRA Filing Fee

  12,000

Legal Fees and Expenses

  900,000

Accounting Fees and Expenses

  500,000

Printing Expenses

  375,000

Miscellaneous

  50,000
 

Total

  $1,843,368

Item 16.    Exhibits and Financial Statement Schedules

Exhibit No.   Description
  1.1   Form of Underwriting Agreement.†

 

3.1

 

Amended and Restated Certificate of Incorporation of Cowen Group, Inc. (previously filed as Exhibit 3.1 to the Form 10-Q filed November 25, 2009 by Cowen Group, Inc.). ‡

 

3.2

 

Amended and Restated By-Laws of Cowen Group, Inc. (previously filed as Exhibit 3.1 to the Form 10-Q filed November 25, 2009 by Cowen Group, Inc.). ‡

 

3.3

 

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Cowen Group, Inc. (previously filed as Exhibit 3.1 to the Form 10-Q filed November 25, 2009 by Cowen Group,  Inc.). ‡

 

4.1

 

Form of Class A Common Stock Certificate.†

 

5.1

 

Opinion of Willkie Farr & Gallagher LLP.†

 

10.1

 

Registration Rights Agreement, dated as of November 2, 2009, by and among Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.), RCG Holdings LLC (f/k/a Ramius LLC), BA Alpine Holdings, Inc., Bayerische Hypo-und Vereinsbank AG, and HVB Alternative Advisors Inc. (previously filed as Exhibit 10.1 to the Form 8-K filed November 5, 2009 by Cowen Group, Inc.). ‡

 

10.2

 

Secured Revolving Credit Agreement, dated as of November 2, 2009, by and among Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.), as Borrower, the various Lenders party thereto from time to time and Bayerische Hypo- und Vereinsbank AG, New York Branch, as Administrative Agent, Issuer of the Letter of Credit, Fronting Bank and a Lender (previously filed as Exhibit 10.2 to the Form 8-K filed November 5, 2009 by Cowen Group, Inc.). ‡

 

10.3

 

Asset Exchange Agreement, dated as of June 3, 2009, by and among RCG Holdings LLC (f/k/a Ramius LLC), HVB Alternative Advisors LLC, Bayerische Hypo- und Vereinsbank AG, Cowen Holdings, Inc. (f/k/a Cowen Group, Inc.), Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.) and Lexington Merger Corp., as amended by the First Amendment to Asset Exchange Agreement, dated as of July 9, 2009 (included as Appendix B to the proxy statement/prospectus forming a part of the Registration Statement on Form S-4 filed July 10, 2009 by Cowen Group, Inc.) ‡

Exhibit No.   Description
  10.4   Employment Agreement of Peter A. Cohen, dated as of June 3, 2009, by and among Peter A. Cohen, Ramius LLC (f/k/a Park Exchange LLC), Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.) and RCG Holdings LLC (f/k/a Ramius LLC) (previously filed as Exhibit 10.3 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009 by Cowen Group, Inc.) ‡

 

10.5

 

Employment Agreement of Morgan Stark, dated as of June 3, 2009, by and among Morgan Stark, Ramius LLC (f/k/a Park Exchange LLC), Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.) and RCG Holdings LLC (f/k/a Ramius LLC) (previously filed as Exhibit 10.4 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009 by Cowen Group, Inc.) ‡

 

10.6

 

Appendix A to Employment Agreement of Morgan Stark, dated as of June 3, 2009, by and between Morgan Stark, Ramius LLC (f/k/a Park Exchange LLC) and RCG Holdings LLC (f/k/a Ramius LLC) (previously filed as Exhibit 10.5 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009 by Cowen Group, Inc.) ‡

 

10.7

 

Employment Agreement of Thomas Strauss, dated as of June 3, 2009, by and among Thomas Strauss, Ramius LLC (f/k/a Park Exchange LLC), Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.) and RCG Holdings LLC (f/k/a Ramius LLC) (previously filed as Exhibit 10.6 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009 by Cowen Group, Inc.) ‡

 

10.8

 

Employment Agreement of David M. Malcolm, dated as of June 3, 2009, by and among David M. Malcolm, Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.), RCG Holdings LLC (f/k/a Ramius LLC) and Cowen Holdings, Inc. (f/k/a Cowen Group, Inc.)†

 

10.9

 

Appendix A to Employment Agreement of David M. Malcolm, dated as of June 3, 2009, by and between David M. Malcolm and Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.)†

 

10.10

 

Employment Agreement of Christopher A. White, dated as of July 10, 2009, by and among Christopher A. White, Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.), and Cowen Holdings, Inc. (f/k/a Cowen Group, Inc.) as amended by that certain letter agreement, dated as of December 8, 2009, by and between Christopher A. White and Cowen Group, Inc.†

 

10.11

 

Employment Agreement of Jeffrey Solomon, dated as of June 3, 2009, by and among Jeffrey Solomon, Ramius LLC (f/k/a Park Exchange LLC), Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.) and RCG Holdings LLC (f/k/a Ramius LLC) (previously filed as Exhibit 10.5 to the Form 8-K filed November 5, 2009 by Cowen Group, Inc.). ‡

 

10.12

 

Amendment to the Investment Management Agreement, dated as of June 3, 2009, by and between Ramius LLC (f/k/a Ramius Capital Group, L.L.C. and successor by assignment from Ramius Securities, L.L.C.) and Alpine Cayman Islands Limited (f/k/a Bank Austria Cayman Islands Limited) (previously filed as Exhibit 99.14 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009 by Cowen Group, Inc.) ‡^

 

10.13

 

Second Amendment to the Investment Reporting Agreement, dated as of June 3, 2009, by and between Ramius Fund of Funds Group LLC (f/k/a Ramius HVB Partners LLC, New York) and Bayerische Hypo- und Vereinsbank AG, Munich) (previously filed as Exhibit 99.15 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009 by Cowen Group, Inc.)‡^

Exhibit No.   Description
  10.14   Lease, dated as of June 22, 2007, by and between BP 599 Lexington Avenue LLC and Ramius LLC (as successor in interest to RCG Holdings LLC (f/k/a Ramius Capital Group, LLC)), as amended by the First Amendment to Lease, dated as of June 9, 2008, by and between BP 599 Lexington Avenue LLC and Ramius LLC (as successor in interest to RCG Holdings LLC (f/k/a Ramius LLC)).†

 

10.15

 

Sublease, dated as of December 19, 2005, by and between Société Générale and SG Cowen & Co., LLC.†

 

10.16

 

Lease, dated as of October 29, 1993, by and between Rock-McGraw, Inc. and Société Générale.†

 

10.17

 

Supplemental Indenture, dated as of May 5, 1998, by and between Rock-McGraw, Inc. and Société Générale.†

 

10.18

 

Indemnification Agreement, dated as of July 11, 2006, by and among Société Générale, SG Americas Securities Holdings, Cowen and Company, LLC and Cowen Holdings, Inc. (f/k/a Cowen Group, Inc.)†

 

10.19

 

Escrow Agreement, dated as of July 12, 2006, by and among SG Americas Securities Holdings, Inc., Cowen and Company, LLC, Cowen Holdings, Inc. (f/k/a Cowen Group, Inc.) and the escrow agent.†

 

10.20

 

Cowen Group, Inc. 2006 Equity and Incentive Plan.†

 

10.21

 

Cowen Group, Inc. 2007 Equity and Incentive Plan.†

 

10.22

 

Equity Award Agreement of Christopher A. White (previously filed as Exhibit 10.1 to the Form 8-K filed December 7, 2009 by Cowen Group, Inc.)‡

 

21.1

 

Subsidiaries of Cowen Group, Inc.†

 

23.1

 

Consent of PricewaterhouseCoopers LLP.‡

 

23.2

 

Consent of Ernst & Young LLP.‡

 

23.3

 

Consent of Willkie Farr & Gallagher LLP (included in the opinion referred to in Exhibit 5.1 above).†

Filed herewith.

Previously filed.

^
Confidential treatment has been granted for certain portions of this exhibit, which portions have been omitted and filed separately with the Securities and Exchange Commission.


SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on this 14th day of December, 2009.

  Cowen Group, Inc.

 

By:

 

/s/ PETER A. COHEN


Name:  Peter A. Cohen
Title:    
Chairman of the Board, Chief Executive Officer and President

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-1 has been signed by the following persons in the capacities indicated and on the dates indicated.

Signature
 
Title
 
Date

 

 

 

 

 
/s/ PETER A. COHEN

Peter A. Cohen
  Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer)   December 14, 2009

/s/ DAVID M. MALCOLM

David M. Malcolm

 

Director

 

December 14, 2009

/s/ JULES B. KROLL

Jules B. Kroll

 

Director

 

December 14, 2009

/s/ JEROME S. MARKOWITZ

Jerome S. Markowitz

 

Director

 

December 14, 2009

/s/ JACK H. NUSBAUM

Jack H. Nusbaum

 

Director

 

December 14, 2009

/s/ L. THOMAS RICHARDS, M.D.

L. Thomas Richards, M.D.

 

Director

 

December 14, 2009

/s/ EDOARDO SPEZZOTTI

Edoardo Spezzotti

 

Director

 

December 14, 2009

/s/ JOHN E. TOFFOLON, JR.

John E. Toffolon, Jr.

 

Director

 

December 14, 2009

/s/ CHARLES W.B. WARDELL, III

Charles W.B. Wardell, III

 

Director

 

December 14, 2009

/s/ JOSEPH R. WRIGHT

Joseph R. Wright

 

Director

 

December 14, 2009


/s/ STEPHEN A. LASOTA

Stephen A. Lasota


 


Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)


 


December 14, 2009


Exhibit Index

Exhibit No.   Description
  1.1   Form of Underwriting Agreement.†

 

3.1

 

Amended and Restated Certificate of Incorporation of Cowen Group, Inc. (previously filed as Exhibit 3.1 to the Form 10-Q filed November 25, 2009 by Cowen Group, Inc.). ‡

 

3.2

 

Amended and Restated By-Laws of Cowen Group, Inc. (previously filed as Exhibit 3.1 to the Form 10-Q filed November 25, 2009 by Cowen Group, Inc.). ‡

 

3.3

 

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Cowen Group, Inc. (previously filed as Exhibit 3.1 to the Form 10-Q filed November 25, 2009 by Cowen Group,  Inc.). ‡

 

4.1

 

Form of Class A Common Stock Certificate.†

 

5.1

 

Opinion of Willkie Farr & Gallagher LLP.†

 

10.1

 

Registration Rights Agreement, dated as of November 2, 2009, by and among Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.), RCG Holdings LLC (f/k/a Ramius LLC), BA Alpine Holdings, Inc., Bayerische Hypo-und Vereinsbank AG, and HVB Alternative Advisors Inc. (previously filed as Exhibit 10.1 to the Form 8-K filed November 5, 2009 by Cowen Group, Inc.). ‡

 

10.2

 

Secured Revolving Credit Agreement, dated as of November 2, 2009, by and among Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.), as Borrower, the various Lenders party thereto from time to time and Bayerische Hypo- und Vereinsbank AG, New York Branch, as Administrative Agent, Issuer of the Letter of Credit, Fronting Bank and a Lender (previously filed as Exhibit 10.2 to the Form 8-K filed November 5, 2009 by Cowen Group, Inc.). ‡

 

10.3

 

Asset Exchange Agreement, dated as of June 3, 2009, by and among RCG Holdings LLC (f/k/a Ramius LLC), HVB Alternative Advisors LLC, Bayerische Hypo- und Vereinsbank AG, Cowen Holdings, Inc. (f/k/a Cowen Group, Inc.), Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.) and Lexington Merger Corp., as amended by the First Amendment to Asset Exchange Agreement, dated as of July 9, 2009 (included as Appendix B to the proxy statement/prospectus forming a part of the Registration Statement on Form S-4 filed July 10, 2009 by Cowen Group, Inc.) ‡

 

10.4

 

Employment Agreement of Peter A. Cohen, dated as of June 3, 2009, by and among Peter A. Cohen, Ramius LLC (f/k/a Park Exchange LLC), Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.) and RCG Holdings LLC (f/k/a Ramius LLC) (previously filed as Exhibit 10.3 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009 by Cowen Group, Inc.) ‡

 

10.5

 

Employment Agreement of Morgan Stark, dated as of June 3, 2009, by and among Morgan Stark, Ramius LLC (f/k/a Park Exchange LLC), Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.) and RCG Holdings LLC (f/k/a Ramius LLC) (previously filed as Exhibit 10.4 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009 by Cowen Group, Inc.) ‡

 

10.6

 

Appendix A to Employment Agreement of Morgan Stark, dated as of June 3, 2009, by and between Morgan Stark, Ramius LLC (f/k/a Park Exchange LLC) and RCG Holdings LLC (f/k/a Ramius LLC) (previously filed as Exhibit 10.5 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009 by Cowen Group, Inc.) ‡

Exhibit No.   Description
  10.7   Employment Agreement of Thomas Strauss, dated as of June 3, 2009, by and among Thomas Strauss, Ramius LLC (f/k/a Park Exchange LLC), Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.) and RCG Holdings LLC (f/k/a Ramius LLC) (previously filed as Exhibit 10.6 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009 by Cowen Group, Inc.) ‡

 

10.8

 

Employment Agreement of David M. Malcolm, dated as of June 3, 2009, by and among David M. Malcolm, Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.), RCG Holdings LLC (f/k/a Ramius LLC) and Cowen Holdings, Inc. (f/k/a Cowen Group, Inc.)†

 

10.9

 

Appendix A to Employment Agreement of David M. Malcolm, dated as of June 3, 2009, by and between David M. Malcolm and Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.)†

 

10.10

 

Employment Agreement of Christopher A. White, dated as of July 10, 2009, by and among Christopher A. White, Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.), and Cowen Holdings, Inc. (f/k/a Cowen Group, Inc.) as amended by that certain letter agreement, dated as of December 8, 2009, by and between Christopher A. White and Cowen Group, Inc.†

 

10.11

 

Employment Agreement of Jeffrey Solomon, dated as of June 3, 2009, by and among Jeffrey Solomon, Ramius LLC (f/k/a Park Exchange LLC), Cowen Group, Inc. (f/k/a LexingtonPark Parent Corp.) and RCG Holdings LLC (f/k/a Ramius LLC) (previously filed as Exhibit 10.5 to the Form 8-K filed November 5, 2009 by Cowen Group, Inc.). ‡

 

10.12

 

Amendment to the Investment Management Agreement, dated as of June 3, 2009, by and between Ramius LLC (f/k/a Ramius Capital Group, L.L.C. and successor by assignment from Ramius Securities, L.L.C.) and Alpine Cayman Islands Limited (f/k/a Bank Austria Cayman Islands Limited) (previously filed as Exhibit 99.14 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009 by Cowen Group, Inc.) ‡^

 

10.13

 

Second Amendment to the Investment Reporting Agreement, dated as of June 3, 2009, by and between Ramius Fund of Funds Group LLC (f/k/a Ramius HVB Partners LLC, New York) and Bayerische Hypo- und Vereinsbank AG, Munich) (previously filed as Exhibit 99.15 to the First Amendment to the Registration Statement on Form S-4 filed August 17, 2009 by Cowen Group, Inc.)‡^

 

10.14

 

Lease, dated as of June 22, 2007, by and between BP 599 Lexington Avenue LLC and Ramius LLC (as successor in interest to RCG Holdings LLC (f/k/a Ramius Capital Group, LLC)), as amended by the First Amendment to Lease, dated as of June 9, 2008, by and between BP 599 Lexington Avenue LLC and Ramius LLC (as successor in interest to RCG Holdings LLC (f/k/a Ramius LLC)).†

 

10.15

 

Sublease, dated as of December 19, 2005, by and between Société Générale and SG Cowen & Co., LLC.†

 

10.16

 

Lease, dated as of October 29, 1993, by and between Rock-McGraw, Inc. and Société Générale.†

 

10.17

 

Supplemental Indenture, dated as of May 5, 1998, by and between Rock-McGraw, Inc. and Société Générale.†

 

10.18

 

Indemnification Agreement, dated as of July 11, 2006, by and among Société Générale, SG Americas Securities Holdings, Cowen and Company, LLC and Cowen Holdings, Inc. (f/k/a Cowen Group, Inc.)†

 

10.19

 

Escrow Agreement, dated as of July 12, 2006, by and among SG Americas Securities Holdings, Inc., Cowen and Company, LLC, Cowen Holdings, Inc. (f/k/a Cowen Group, Inc.) and the escrow agent.†

Exhibit No.   Description
  10.20   Cowen Group, Inc. 2006 Equity and Incentive Plan.†

 

10.21

 

Cowen Group, Inc. 2007 Equity and Incentive Plan.†

 

10.22

 

Equity Award Agreement of Christopher A. White (previously filed as Exhibit 10.1 to the Form 8-K filed December 7, 2009 by Cowen Group, Inc.)‡

 

21.1

 

Subsidiaries of Cowen Group, Inc.†

 

23.1

 

Consent of PricewaterhouseCoopers LLP.‡

 

23.2

 

Consent of Ernst & Young LLP.‡

 

23.3

 

Consent of Willkie Farr & Gallagher LLP (included in the opinion referred to in Exhibit 5.1 above).†

Filed herewith.

Previously filed.

^
Confidential treatment has been granted for certain portions of this exhibit, which portions have been omitted and filed separately with the Securities and Exchange Commission.



QuickLinks

Explanatory Note
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
Exhibit Index

Exhibit 1.1

 

 

 

COWEN GROUP, INC.

 

(a Delaware corporation)

 

                          Shares of Class A Common Stock*

 

PURCHASE AGREEMENT

 

Dated:  December          , 2009

 

 


*  Plus an option to purchase from Cowen Group, Inc. all or any part of                     additional Class A Common Stock

 



 

COWEN GROUP, INC.

 

(a Delaware corporation)

 

                Shares of Common Stock

 

PURCHASE AGREEMENT

 

December        , 2009

 

Cowen and Company, LLC

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

Credit Suisse Securities (USA) LLC

Sandler O’Neill & Partners, L.P.

as Representatives of the several Underwriters

 

c/o          Merrill Lynch, Pierce, Fenner & Smith

Incorporated

One Bryant Park

New York, New York 10036

 

Ladies and Gentlemen:

 

Cowen Group, Inc., a Delaware corporation (the “Company”), and RCG Holdings LLC (the “Selling Shareholder”) confirm their respective agreements with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and each of the other Underwriters named in Schedule A hereto (collectively, the “Underwriters,” which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Cowen and Company, LLC, Merrill Lynch, Credit Suisse Securities (USA) LLC and Sandler O’Neill & Partners, L.P. are acting as representatives (in such capacity, the “Representatives”), with respect to (i) the issue and sale by the Company and the Selling Shareholder acting severally and not jointly and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of shares of Class A Common Stock, par value $0.01 per share, of the Company (the “Common Stock”) set forth in Schedules A and B hereto and (ii) the grant by the Company to the Underwriters, acting severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any part of               additional shares of Common Stock to cover overallotments, if any.  The aforesaid                  shares of Common Stock (the “Initial Securities”) to be purchased by the Underwriters and all or any part of the                 shares of Common Stock subject to the option described in Section 2(b) hereof (the “Option Securities”) are herein called, collectively, the “Securities.”

 

The Company and the Selling Shareholder understand that the Underwriters propose to make a public offering of the Securities as soon as the Representatives deem advisable after this Agreement has been executed and delivered.

 

The Company and the Underwriters agree that up to               shares of the Initial Securities to be purchased by the Underwriters from the Company (the “Reserved Securities”) shall be reserved for sale by the Underwriters to certain persons designated by the Company (the “Invitees”), as part of the distribution of the Securities by the Underwriters, subject to the terms of this Agreement, the applicable

 

1



 

rules, regulations and interpretations of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and all other applicable laws, rules and regulations.  The Company solely determined, without any direct or indirect participation by the Underwriters, the Invitees who will purchase Reserved Securities (including the amount to be purchased by such persons) sold by the Underwriters.  To the extent that such Reserved Securities are not orally confirmed for purchase by Invitees by           [A.M][P.M.] (New York City time) on the first business day after the date of this Agreement, such Reserved Securities may be offered to the public as part of the public offering contemplated hereby.

 

The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1 (No.  333-163372), including the related preliminary prospectus or prospectuses, covering the registration of the sale of the Securities under the Securities Act of 1933, as amended (the “1933 Act”).  Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus in accordance with the provisions of Rule 430A (“Rule 430A”) of the rules and regulations of the Commission under the 1933 Act (the “1933 Act Regulations”) and Rule 424(b) (“Rule 424(b)”) of the 1933 Act Regulations.  The information included in such prospectus that was omitted from such registration statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective pursuant to Rule 430A(b) is herein called the “Rule 430A Information.”  Such registration statement, including the amendments thereto, the exhibits thereto and any schedules thereto, at the time it became effective, and including the Rule 430A Information, is herein called the “Registration Statement.”  Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein called the “Rule 462(b) Registration Statement” and, after such filing, the term “Registration Statement” shall include the Rule 462(b) Registration Statement.  Each prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “preliminary prospectus.”  The final prospectus, in the form first furnished to the Underwriters for use in connection with the offering of the Securities, is herein called the “Prospectus.”  For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”) or its Interactive Data Electronic Applications system (“IDEA”).

 

As used in this Agreement:

 

“Applicable Time” means              [A.M.][P.M.] New York City time, on                    or such other time as agreed by the Company and Merrill Lynch.

 

“General Disclosure Package” means any Issuer General Use Free Writing Prospectuses issued at or prior to the Applicable Time, the prospectus that is included in the Registration Statement as of the Applicable Time and the information included on Schedule B-1 hereto, all considered together.

 

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the 1933 Act Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined in Rule 405 of the 1933 Act Regulations (“Rule 405”)) relating to the Securities that is (i) required to be filed with the Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the

 

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Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

 

“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors as evidenced by its being specified in Schedule B-2 hereto.

 

“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.

 

SECTION 1.           Representations and Warranties.

 

(a)           Representations and Warranties by the Company.  The Company represents and warrants to each Underwriter as of the date hereof, the Applicable Time, the Closing Time (as defined below) and any Date of Delivery (as defined below), and agrees with each Underwriter, as follows:

 

(i)            Registration Statement and Prospectuses.  Each of the Registration Statement and any post-effective amendment thereto has become effective under the 1933 Act.  No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, threatened.  The Company has complied with each request (if any) from the Commission for additional information with respect to the offering of the Securities.

 

Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations.  Each preliminary prospectus (including the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto), at the time it was filed, and the Prospectus complied in all material respects with the 1933 Act and the 1933 Act Regulations.  Each preliminary prospectus delivered to the Underwriters for use in connection with this offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR or IDEA, except to the extent permitted by Regulation S-T.

 

(ii)           Accurate Disclosure.  Neither the Registration Statement nor any amendment thereto, at its effective time, at the Closing Time (or at any Date of Delivery, if any Option Securities are purchased), contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.  As of the Applicable Time, neither (A) the General Disclosure Package nor (B) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b) or at the Closing Date (or at any Date of Delivery, if any Option Securities are purchased), included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

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The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement (or any amendment thereto), the General Disclosure Package, any Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto) made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through Merrill Lynch expressly for use therein.  For purposes of this Agreement, the only information so furnished shall be the information in the first paragraph under the heading “Underwriting (Conflicts of Interest)—Commissions and Discounts,” the information in the second, third and fourth paragraphs under the heading “Underwriting (Conflicts of Interest)—Price Stabilization, Short Positions” in the Prospectus and the information under the heading “Underwriting (Conflicts of Interest)—Electronic Offer, Sale and Distribution of Shares” (collectively, the “Underwriter Information”).

 

(iii)          Issuer Free Writing Prospectuses.  No Issuer Free Writing Prospectus conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, and any preliminary or other prospectus deemed to be a part thereof that has not been superseded or modified.

 

(iv)          Company Not Ineligible Issuer.  At the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.

 

(v)           Independent Accountants of the Company.  The accountants who certified the financial statements and supporting schedules of the Company and Ramius LLC, the predecessor entity of the Company for accounting purposes, included in the Registration Statement are independent public accountants as required by the 1933 Act, the 1933 Act Regulations, the Securities Exchange Act of 1934, as amended (the “1934 Act”), the rules and regulations of the Commission under the 1934 Act (the “1934 Act Regulations”) and the Public Accounting Oversight Board.

 

(vi)          Independent Accountants of CowenThe accountants who certified the financial statements and supporting schedules of Cowen Group, Inc., the predecessor to Cowen Holdings, Inc., a subsidiary of the Company (“Cowen”), included in the Registration Statement were, at all relevant times, independent public accountants as required by the 1933 Act, the 1933 Act Regulations, the 1934 Act, the 1934 Act Regulations and the Public Accounting Oversight Board.

 

(vii)         Financial Statements; Non-GAAP Financial Measures.  The financial statements of the Company and RCG Holdings LLC (f/k/a Ramius LLC) included in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related schedules and notes, present fairly in all material respects the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved.  The supporting schedules, if any, present fairly in all material respects in accordance with GAAP the information required to be stated therein.  The selected financial data and the summary financial information in the Registration Statement, the General Disclosure Package and the Prospectus present fairly in all material respects the information shown therein and have been

 

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compiled on a basis consistent with that of the audited financial statements included therein.  The pro forma financial statements and the related notes thereto included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly in all material respects the information shown therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements and have been compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein.  Except as included therein, no historical or pro forma financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the General Disclosure Package or the Prospectus under the 1933 Act or the 1933 Act Regulations.  All disclosures contained in the Registration Statement, the General Disclosure Package or the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the 1934 Act and Item 10 of Regulation S-K of the 1933 Act, to the extent applicable.

 

(viii)        Financial Statements; Non-GAAP Financial Measures of Cowen.  The financial statements of Cowen included in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related schedules and notes, present fairly in all material respects the financial position of Cowen and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of Cowen and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved.  The supporting schedules, if any, present fairly in all material respects in accordance with GAAP the information required to be stated therein.  The selected financial data and the summary financial information regarding Cowen included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly in all material respects the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included therein.

 

(ix)           No Material Adverse Change in Business.  Except as otherwise stated therein, since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a “Material Adverse Effect”), (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise, and (C) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.

 

(x)            Good Standing of the Company.  The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the General Disclosure Package and the Prospectus and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect.

 

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(xi)           Good Standing of Subsidiaries.  Cowen Holdings, Inc., Cowen and Company, LLC, Ramius LLC, Ramius Advisors, LLC and Ramius Alternative Solutions LLC are the only “significant subsidiaries” of the Company (as such term is defined in Rule 1-02 of Regulation S-X, but determined as of September 30, 2009, on a pro forma basis giving effect to the Transactions (as such term is defined in Amendment No. 1 to the Registration Statement)) (each, a “Subsidiary” and, collectively, the “Subsidiaries”).  Each of the Subsidiaries has been duly organized and is validly existing in good standing under the laws of the jurisdiction of its incorporation or organization, has corporate or similar power and authority to own, lease and operate its properties and to conduct its business as described in the General Disclosure Package and the Prospectus and is duly qualified to transact business and in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or to be in good standing would not result in a Material Adverse Effect.  Except as otherwise disclosed in the General Disclosure Package and the Prospectus, all of the issued and outstanding capital stock or equity interests of each Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity.  None of the outstanding shares of capital stock or equity interests of any Subsidiary was issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary.  The only subsidiaries of the Company are (A) the subsidiaries listed on Exhibit 21 to the Registration Statement and (B) certain other subsidiaries which, considered in the aggregate as a single subsidiary, do not constitute a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X.  In no event shall either Ramius Enterprise Master Ltd. or Ramius Enterprise LP be considered a “significant subsidiary” (as such term is defined in Rule 1-02 of Regulation S-X), a “subsidiary” of the Company or a “Subsidiary” for purposes of this Agreement.

 

(xii)          Capitalization.  The authorized, issued and outstanding shares of capital stock of the Company are as set forth in the General Disclosure Package and the Prospectus under the heading “Description of Capital Stock—Authorized Capital Stock” (except for subsequent issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the General Disclosure Package and the Prospectus or pursuant to the exercise of convertible securities or options referred to in the General Disclosure Package and the Prospectus).  The outstanding shares of capital stock of the Company, including the Securities to be purchased by the Underwriters from the Selling Shareholder, have been duly authorized and validly issued and are fully paid and non-assessable.  None of the outstanding shares of capital stock of the Company, including the Securities to be purchased by the Underwriters from the Selling Shareholder, was issued in violation of the preemptive or other similar rights of any securityholder of the Company.

 

(xiii)         Authorization of Agreement.  This Agreement has been duly authorized, executed and delivered by the Company.

 

(xiv)        Authorization and Description of Securities.  The Securities to be purchased by the Underwriters from the Company have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued and fully paid and non-assessable; and the issuance of the Securities is not subject to the preemptive or other similar rights of any securityholder of the Company.  The Common Stock conforms in all material respects to all statements relating thereto contained in the General Disclosure Package and the Prospectus and such description conforms to the rights set forth in the

 

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instruments defining the same.  No holder of Securities will be subject to personal liability by reason of being such a holder.

 

(xv)         Registration Rights.  There are no persons with registration rights or other similar rights to have any securities registered for sale pursuant to the Registration Statement.  There are no persons with registration rights or other similar rights to have any securities registered for sale by the Company under the 1933 Act, other than those rights that have been disclosed in the General Disclosure Package and the Prospectus.

 

(xvi)        Absence of Violations, Defaults and Conflicts.  Neither the Company nor any of its Subsidiaries is in violation of its charter, by-laws or similar organizational document.  Neither the Company nor any of its subsidiaries is (A) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound or to which any of the properties or assets of the Company or any subsidiary is subject (collectively, “Agreements and Instruments”), except for such defaults that would not, singly or in the aggregate, result in a Material Adverse Effect, or (B) in violation of any law, statute, rule, regulation, judgment, order, writ or decree of any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Company or any of its subsidiaries or any of their respective properties, assets or operations (each, a “Governmental Entity”), except for such violations that would not, singly or in the aggregate, result in a Material Adverse Effect.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein and in the General Disclosure Package and the Prospectus (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described therein under the caption “Use of Proceeds”) and compliance by the Company with its obligations hereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any properties or assets of the Company or any subsidiary pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not, singly or in the aggregate, result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the charter, by-laws or similar organizational document of the Company or any of its subsidiaries or any law, statute, rule, regulation, judgment, order, writ or decree of any Governmental Entity.  As used herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.

 

(xvii)       Absence of Labor Dispute.  No labor dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or any subsidiary’s principal suppliers, manufacturers, customers or contractors, which, in either case, would result in a Material Adverse Effect.

 

(xviii)      Absence of Proceedings.  Except as disclosed in the General Disclosure Package and the Prospectus, there is no action, suit, proceeding, inquiry or investigation before or brought by any Governmental Entity now pending or, to the knowledge of the Company, threatened, against or affecting the Company or any of its subsidiaries, which might result in a Material

 

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Adverse Effect, or which might materially and adversely affect the consummation of the transactions contemplated in this Agreement or the performance by the Company of its obligations hereunder; and the aggregate of all pending legal or governmental proceedings to which the Company or any such subsidiary is a party or of which any of their respective properties or assets is the subject which are not described in the General Disclosure Package and the Prospectus, including ordinary routine litigation incidental to the business, would not reasonably be expected to result in a Material Adverse Effect.

 

(xix)                           Accuracy of Exhibits.  There are no contracts or documents which are required to be described in the Registration Statement or to be filed as exhibits thereto which have not been so described and filed as required.

 

(xx)                              Absence of Further Requirements.  No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any Governmental Entity is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement, except (A) such as have been already obtained or as may be required under the 1933 Act, the 1933 Act Regulations, the rules of the NASDAQ Global Market LLC, state securities laws or the rules of FINRA and (B) such as have been obtained under the laws and regulations of jurisdictions outside the United States in which the Reserved Securities were offered.

 

(xxi)                           Possession of Licenses and Permits.  The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate Governmental Entities necessary to conduct the business now operated by them, except where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect.  The Company and its subsidiaries are in compliance with the terms and conditions of all Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect.  All of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or in the aggregate, result in a Material Adverse Effect.  Neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect.

 

(xxii)                        Broker-Dealer Compliance.  Cowen and Company, LLC and Ramius Securities LLC are the only broker-dealer subsidiaries of the Company and the Subsidiaries.  Cowen and Company, LLC is registered as a broker-dealer with the Commission and under the laws of all fifty U.S. states, the District of Columbia and Puerto Rico, is a member of FINRA and the New York Stock Exchange, and, in each case, is in compliance with all applicable laws, rules, regulations, orders, by-laws and similar requirements in connection with such registrations and memberships, including without limitation Rule 15c3-1 under the Exchange Act, except where the failure to be so registered or in such compliance would not have a Material Adverse Effect.  The Company no longer conducts significant business through Ramius Securities LLC and Ramius Securities LLC is in the process of winding up its business.

 

(xxiii)                     Investment Adviser Compliance.  Ramius LLC, Ramius Asia LLC, Ramius Securities LLC, Ramius Alternative Solutions LLC, Ramius Advisors LLC, Ramius Structured Credit Group LLC and RCG Starboard Advisors, LLC are the only U.S. investment adviser subsidiaries of the Company and the Subsidiaries and each of them is registered as an investment

 

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adviser under the Investment Advisers Act of 1940, as amended, or exempt from registration under such act and under the laws of all fifty states, the District of Columbia and Puerto Rico, and is in compliance in all material respects with all applicable laws, rules, regulations, orders and similar requirements in connection therewith except where the failure to be so registered or in such compliance therewith would not have a Material Adverse Effect.  Ramius Japan Ltd. holds a Type II Financial Instrument Trading Business registration with the Financial Services Agency of Japan, Ramius Asia Ltd is an investment adviser registered in Hong Kong with the Securities and Futures Commission; and Ramius UK Ltd is an investment adviser registered in the United Kingdom with the Financial Services Authority, and each is in compliance in all material respects with all applicable laws, rules, regulations, orders and similar requirements applicable to it except where the failure to be so registered or in such compliance therewith would not have a Material Adverse Effect.

 

(xxiv)                    Title to Property.  The Company and its subsidiaries have good and marketable title to all real property owned by them and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (A) are described in the General Disclosure Package and the Prospectus or (B) do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries to the extent that such effect or interference would be reasonably expected to have a Material Adverse Effect; and all of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company or any of its subsidiaries holds properties described in the General Disclosure Package and the Prospectus, are in full force and effect except as would not reasonably be expected to have a Material Adverse Effect, and neither the Company nor any such subsidiary has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease.

 

(xxv)                       Possession of Intellectual Property.  The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect.

 

(xxvi)                    Environmental Laws.  Except as described in the General Disclosure Package and the Prospectus or would not, singly or in the aggregate, result in a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or

 

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threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos-containing materials or mold (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (B) the Company and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (C) there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (D) there are no events or circumstances that would reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or Governmental Entity, against or affecting the Company or any of its subsidiaries relating to Hazardous Materials or any Environmental Laws.

 

(xxvii)                 Accounting Controls and Disclosure Controls.  The Company and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  Except as described in the General Disclosure Package and the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (1) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (2) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially and adversely affect, the Company’s internal control over financial reporting.

 

The Company and its subsidiaries maintain an effective system of disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the 1934 Act Regulations) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure.

 

(xxviii)              Compliance with the Sarbanes-Oxley Act.  There is, and has been, no failure on the part of the Company or any of the Company’s directors of officers, in their capacities as such, to comply in all material respects with any applicable provision of the Sarbanes-Oxley Act of 2002 and any applicable rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications.

 

(xxix)                      Payment of Taxes.  All United States federal income tax returns of the Company and its Subsidiaries required by law to be filed have been filed and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided.  The Company and its subsidiaries have filed all other tax returns that are required to have been filed by them pursuant to applicable foreign, state, local or other law except insofar as the failure to file such returns would not result in a Material Adverse Effect, and has

 

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paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company and its subsidiaries, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been established by the Company.  The charges, accruals and reserves on the books of the Company in respect of any income and corporation tax liability for any years not finally determined are adequate to meet any assessments or re-assessments for additional income tax for any years not finally determined, except to the extent of any inadequacy that would not result in a Material Adverse Effect.

 

(xxx)                         Insurance.  The Company and its subsidiaries carry or are entitled to the benefits of insurance covering their respective properties, operations, personnel and businesses, which insurance is in such amounts and insures against such losses and risks as the Company reasonably believes are adequate to protect the Company and its subsidiaries and their respective businesses, and all such insurance is in full force and effect.  The Company has no reason to believe that it or any of its subsidiaries will not be able (A) to renew its existing insurance coverage as and when such policies expire or (B) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change.  Neither of the Company nor any of its subsidiaries has been denied any insurance coverage which it has sought or for which it has applied.

 

(xxxi)                      Investment Company Act.  The Company is not required, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the General Disclosure Package and the Prospectus will not be required, to register as an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”).

 

(xxxii)                   Absence of Manipulation.  Neither the Company nor any affiliate of the Company has taken, nor will the Company or any affiliate take, directly or indirectly, any action which is designed, or would be expected, to cause or result in, or which constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.

 

(xxxiii)                Foreign Corrupt Practices Act.  None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

(xxxiv)               Money Laundering Laws.  The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any

 

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Governmental Entity (collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

 

(xxxv)                  OFAC.  None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to any of its subsidiaries, joint venture partners or other person, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

 

(xxxvi)               Sales of Reserved Securities.  In connection with any offer and sale of Reserved Securities outside the United States, each preliminary prospectus, the Prospectus, any prospectus wrapper and any amendment or supplement thereto, at the time it was filed, complied and will comply in all material respects with any applicable laws or regulations of foreign jurisdictions.  The Company has not offered, or caused the Representatives to offer, Reserved Securities to any person with the specific intent to unlawfully influence (i) a customer or supplier of the Company or any of its affiliates to alter the customer’s or supplier’s level or type of business with any such entity or (ii) a trade journalist or publication to write or publish favorable information about the Company or any of its affiliates, or their respective businesses or products.

 

(xxxvii)            Statistical and Market-Related Data.  Any statistical and market-related data included in the General Disclosure Package or the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate and the Company has obtained the written consent to the use of such data from such sources to the extent the consent of such sources is, to the Company’s knowledge, required for the use of such data.

 

(b)                                 Representations and Warranties by the Selling Shareholder.  The Selling Shareholder represents and warrants to each Underwriter as of the date hereof, as of the Applicable Time and as of the Closing Time and agrees with each Underwriter, as follows:

 

(i)                                     Accurate Disclosure.  The information regarding the Selling Shareholder in the General Disclosure Package and the Prospectus appearing under the heading “Security Ownership of Certain Beneficial Owners, the Selling Stockholder and Management” in the Prospectus (the “Selling Shareholder Information”) does not include any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; the Selling Shareholder is not prompted to sell the Securities to be sold by the Selling Shareholder hereunder by any information concerning the Company or any subsidiary of the Company which is not set forth in the General Disclosure Package or the Prospectus.

 

(ii)                                  Authorization of this Agreement.  This Agreement has been duly authorized, executed and delivered by and on behalf of the Selling Shareholder.

 

(iii)                               Noncontravention.  The execution and delivery of this Agreement and the sale and delivery of the Securities to be sold by the Selling Shareholder and the consummation of the transactions contemplated herein and compliance by the Selling Shareholder with its obligations hereunder have been duly authorized by all necessary action and do not and will not, whether

 

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with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon the Securities to be sold by the Selling Shareholder or any property or assets of the Selling Shareholder pursuant to any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, license, lease or other agreement or instrument to which the Selling Shareholder is a party or by which the Selling Shareholder may be bound, or to which any of the property or assets of the Selling Shareholder is subject, nor will such action result in any violation of the provisions of the certificate of formation or limited liability company agreement or similar organizational instrument of the Selling Shareholder, or any applicable treaty, law, statute, rule, regulation, judgment, order, writ or decree of any Governmental Entity.

 

(iv)                              Valid Title.  The Selling Shareholder has, and at the Closing Time will have, valid title to the Securities to be sold by the Selling Shareholder free and clear of all security interests, claims, liens, equities or other encumbrances and the legal right and power, and all authorization and approval required by law, to enter into this Agreement and to sell, transfer and deliver the Securities to be sold by such Selling Shareholder or a valid security entitlement in respect of such Securities.

 

(v)                                 Delivery of Securities.  Upon payment of the purchase price for the Securities to be sold by the Selling Shareholder pursuant to this Agreement, delivery of such Securities, as directed by the Underwriters, to Cede & Co. (“Cede”) or such other nominee as may be designated by The Depository Trust Company (“DTC”) (unless delivery of such Securities is unnecessary because such Securities are already in possession of Cede or such nominee), registration of such Securities in the name of Cede or such other nominee (unless registration of such Securities is unnecessary because such Securities are already registered in the name of Cede or such nominee), and the crediting of such Securities on the books of DTC to securities accounts (within the meaning of Section 8-501(a) of the UCC) of the Underwriters (assuming that neither DTC nor any such Underwriter has notice of any “adverse claim,” within the meaning of Section 8-105 of the Uniform Commercial Code then in effect in the State of New York (“UCC”), to such Securities), (A) under Section 8-501 of the UCC, the Underwriters will acquire a valid “security entitlement” in respect of such Securities and (B) no action (whether framed in conversion, replevin, constructive trust, equitable lien, or other theory) based on any “adverse claim,” within the meaning of Section 8-102 of the UCC, to such Securities may be asserted against the Underwriters with respect to such security entitlement; for purposes of this representation, the Selling Shareholder may assume that when such payment, delivery (if necessary) and crediting occur, (I) such Securities will have been registered in the name of Cede or another nominee designated by DTC, in each case on the Company’s share registry in accordance with its certificate of incorporation, bylaws and applicable law, (II) DTC will be registered as a “clearing corporation,” within the meaning of Section 8-102 of the UCC, (III) appropriate entries to the accounts of the several Underwriters on the records of DTC will have been made pursuant to the UCC, (IV) to the extent DTC, or any other securities intermediary which acts as “clearing corporation” with respect to the Securities, maintains any “financial asset” (as defined in Section 8-102(a)(9) of the UCC in a clearing corporation pursuant to Section 8-111 of the UCC, the rules of such clearing corporation may affect the rights of DTC or such securities intermediaries and the ownership interest of the Underwriters, (V) claims of creditors of DTC or any other securities intermediary or clearing corporation may be given priority to the extent set forth in Section 8-511(b) and 8-511(c) of the UCC and (VI) if at any time DTC or other securities intermediary does not have sufficient Securities to satisfy claims of all of its entitlement holders with respect thereto then all holders will share pro rata in the Securities then held by DTC or such securities intermediary.

 

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(vi)                              Absence of Manipulation.  The Selling Shareholder has not taken, and will not take, directly or indirectly, any action which is designed to or which has constituted or would be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.

 

(vii)                           Absence of Further Requirements.  No filing with, or consent, approval, authorization, order, registration, qualification or decree of any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency, domestic or foreign, is necessary or required for the performance by the Selling Shareholder of its obligations hereunder or in connection with the sale and delivery of the Securities hereunder or the consummation of the transactions contemplated by this Agreement, except (A) such as have been already obtained or as may be required under the 1933 Act, the 1933 Act Regulations, the rules of the NASDAQ Stock Market LLC, state securities laws or the rules of FINRA, and (B) such as have been obtained under the laws and regulations of jurisdictions outside the United States in which the Reserved Securities were offered.

 

(viii)                        No Registration or Other Similar Rights.  The Selling Shareholder does not have any registration or other similar rights to have any equity or debt securities registered for sale by the Company under the Registration Statement or included in the offering contemplated by this Agreement.

 

(ix)                                No Free Writing ProspectusesThe Selling Shareholder has not prepared or had prepared on its behalf or used or referred to, any “free writing prospectus” (as defined in Rule 405), and has not distributed any written materials in connection with the offer or sale of the Securities.

 

(c)                                  Officer’s Certificates.  Any certificate signed by any officer of the Company or any of its subsidiaries delivered to the Representatives or to counsel for the Underwriters shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby; and any certificate signed by or on behalf of the Selling Shareholder as such and delivered to the Representatives or to counsel for the Underwriters pursuant to the terms of this Agreement shall be deemed a representation and warranty by the Selling Shareholder to the Underwriters as to the matters covered thereby.

 

SECTION 2.                                Sale and Delivery to Underwriters; Closing.

 

(a)                                  Initial Securities.  On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company and the Selling Shareholder, severally and not jointly, agree to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company, and the Selling Shareholder, at the price per share set forth in Schedule A, that proportion of the number of Initial Securities set forth in Schedule B opposite the name of the Company or the Selling Shareholder, as the case may be, which the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional number of Initial Securities which such Underwriter may become obligated to purchase

 

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pursuant to the provisions of Section 10 hereof, bears to the total number of Initial Securities, subject, in each case, to such adjustments among the Underwriters as Merrill Lynch in its sole discretion shall make to eliminate any sales or purchases of fractional shares.

 

(b)                                 Option Securities.  In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby grant(s) an option to the Underwriters, severally and not jointly, to purchase up to an additional                  shares of Common Stock, at the price per share set forth in Schedule A, less an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities.  The option hereby granted will expire 30 days after the date hereof and may be exercised in whole or in part from time to time only for the purpose of covering overallotments made in connection with the offering and distribution of the Initial Securities upon notice by the Representatives to the Company setting forth the number of Option Securities as to which the several Underwriters are then exercising the option and the time and date of payment and delivery for such Option Securities.  Any such time and date of delivery (a “Date of Delivery”) shall be determined by the Representatives, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time, as hereinafter defined.  If the option is exercised as to all or any portion of the Option Securities, each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total number of Option Securities then being purchased which the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter bears to the total number of Initial Securities, subject, in each case, to such adjustments as Merrill Lynch in its sole discretion shall make to eliminate any sales or purchases of fractional shares.

 

(c)                                  Payment.  Payment of the purchase price for, and delivery of certificates for, the Initial Securities shall be made at the offices of Sidley Austin LLP, 787 Seventh Avenue, New York, New York 10019, or at such other place as shall be agreed upon by the Representatives and the Company, and the Selling Shareholder at 9:00 A.M. (New York City time) on the third (fourth, if the pricing occurs after 4:30 P.M. (New York City time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Representatives and the Company and the Selling Shareholder (such time and date of payment and delivery being herein called “Closing Time”).

 

In addition, in the event that any or all of the Option Securities are purchased by the Underwriters, payment of the purchase price for, and delivery of certificates for, such Option Securities shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Representatives and the Company, on each Date of Delivery as specified in the notice from the Representatives to the Company.

 

Payment shall be made to the Company and the Selling Shareholder by wire transfer of immediately available funds to bank accounts designated by the Company and the Selling Shareholder against delivery to the Representatives for the respective accounts of the Underwriters of certificates for the Securities to be purchased by them.  It is understood that each Underwriter has authorized the Representatives, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Initial Securities and the Option Securities, if any, which it has agreed to purchase.  Merrill Lynch, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Initial Securities or the Option Securities, if any, to be purchased by any Underwriter whose funds have not been received by the Closing Time or the relevant Date of Delivery, as the case may be, but such payment shall not relieve such Underwriter from its obligations hereunder.

 

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(d)           Denominations; Registration.  Certificates for the Initial Securities and the Option Securities, if any, shall be in such denominations and registered in such names as the Representatives may request in writing at least one full business day before the Closing Time or the relevant Date of Delivery, as the case may be.  The certificates for the Initial Securities and the Option Securities, if any, will be made available for examination and packaging by the Representatives in The City of New York not later than 10:00 A.M. (New York City time) on the business day prior to the Closing Time or the relevant Date of Delivery, as the case may be.

 

(e)           Appointment of Qualified Independent Underwriter.  The Company and the Selling Shareholder hereby confirm their engagement of Merrill Lynch as, and Merrill Lynch hereby confirms its agreement with the Company and the Selling Shareholder to render services as, a “qualified independent underwriter” within the meaning of NASD Conduct Rule 2720 adopted by FINRA (“Rule 2720”) with respect to the offering and sale of the Securities.  Merrill Lynch, solely in its capacity as qualified independent underwriter and not otherwise, is referred to herein as the “QIU.”

 

SECTION 3.           Covenants of the Company, the Selling Shareholder and the Underwriters.

 

(a)           The Company covenants with each Underwriter as follows:

 

(i)            Compliance with Securities Regulations and Commission Requests.  The Company, subject to Section 3(a)(ii), will comply with the requirements of Rule 430A, and will notify the Representatives promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the Securities.  The Company will effect all filings required under Rule 424(b), in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus.  The Company will use its reasonable efforts to prevent the issuance of any stop order and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.

 

(ii)           Continued Compliance with Securities Laws.  The Company will comply with the 1933 Act and the 1933 Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the General Disclosure Package and the Prospectus.  If at any time when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172 of the 1933 Act Regulations (“Rule 172”), would be) required by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (x) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (y) amend or

 

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supplement the General Disclosure Package or the Prospectus in order that the General Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (z) amend the Registration Statement or amend or supplement the General Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly (A) give the Representatives notice of such event, (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the General Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representatives with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representatives or counsel for the Underwriters shall reasonably object.  The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request.  The Company has given the Representatives notice of any filings made pursuant to the 1934 Act or 1934 Act Regulations within 48 hours prior to the Applicable Time; the Company has given or will give, as the case may be, the Representatives notice of its intention to make any such filing from the Applicable Time to the Closing Time and will furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Representatives or counsel for the Underwriters shall reasonably object.

 

(iii)          Delivery of Registration Statements.  The Company has furnished or will deliver to the Representatives and counsel for the Underwriters, without charge, signed copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts, and will also deliver to the Representatives, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) for each of the Underwriters.  The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

 

(iv)          Delivery of Prospectuses.  The Company has delivered to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act.  The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the 1933 Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request.  The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

 

(v)           Blue Sky Qualifications.  The Company will use its reasonable best efforts, in cooperation with the Underwriters, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representatives may designate and to maintain such qualifications in effect so long as required to complete the distribution of the Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or

 

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as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.

 

(vi)          Rule 158.  The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.

 

(vii)         Use of Proceeds.  The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the General Disclosure Package and the Prospectus under “Use of Proceeds.”

 

(viii)        Listing.  The Company will use its reasonable best efforts to effect and maintain the listing of the Securities on the NASDAQ Global Market.

 

(ix)           Restriction on Sale of Securities.  During a period of 90 days from the date of the Prospectus, the Company will not, without the prior written consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or file any registration statement under the 1933 Act (other than (x) a registration statement on Form S-8 under the 1933 Act or (y) a registration statement on Form S-1 with respect to the sale of shares of Common Stock by BA Alpine holdings, Inc., Bayerische Hypo- und Vereinsbank AG or HVB Alternative Advisors LLC if requested by any such entity pursuant to that certain Registration Rights Agreement of the Company, dated as of November 2, 2009, provided, that the Company shall not make any request that such registration statement be declared effective and no shares of Common Stock will be sold thereunder within such 90-day period) with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise.  The foregoing sentence shall not apply to (A) the Securities to be sold hereunder, (B) any shares of Common Stock issued by the Company upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof and referred to in the General Disclosure Package and the Prospectus, (C) any shares of Common Stock issued or to be issued or options to purchase Common Stock granted or to be granted pursuant to existing employee benefit plans of the Company referred to in the General Disclosure Package and the Prospectus or (D) any shares of Common Stock issued pursuant to any non-employee director stock plan or dividend reinvestment plan referred to in the General Disclosure Package and the Prospectus.  Notwithstanding the foregoing, if (1) during the last 17 days of the 90-day restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the 90-day restricted period, the Company announces that it will issue an earnings release or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the 90-day restricted period, the restrictions imposed in this clause (i) shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.  During the 90-day restricted period, to the extent the consent, agreement, waiver or otherwise the permission of the Company is required by a third party to, directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any shares of Common Stock or any securities

 

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convertible into or exercisable or exchangeable for Common Stock, by such third party, the Company will not consent to, agree to, waive any right to limit, restrict or veto, or otherwise permit any of the foregoing.

 

(x)            Reporting Requirements.  The Company, during the period when a Prospectus relating to the Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the 1933 Act, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and 1934 Act Regulations.

 

(xi)           Issuer Free Writing Prospectuses.  The Company agrees that, unless it obtains the prior written consent of the Representatives, it will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the Representatives will be deemed to have consented to the Issuer Free Writing Prospectuses listed on Schedule B-2 hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representatives.  The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed consented to, by the Representatives as an “issuer free writing prospectus,” as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission where required, legending and record keeping.  If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

 

(b)           The Selling Shareholder covenants with each Underwriter that, unless it obtains the prior written consent of the Representatives, it will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the Representatives will be deemed to have consented to the Issuer Free Writing Prospectuses listed on Schedule B-2 hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representatives.

 

(c)           Each Underwriter severally covenants with the Company that, unless it obtains the prior written consent of the Company, it will not make any offer relating to the Securities that would constitute a “free writing prospectus” required to be filed by the Company with the Commission or retained by the Company under Rule 433.

 

SECTION 4.           Payment of Expenses.

 

(a)           Expenses.  The Company will pay or cause to be paid all expenses incident to the performance of their obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally filed and each amendment thereto, (ii) the preparation, issuance and delivery of the certificates for the Securities to the Underwriters, including any stock or other transfer taxes and any stamp or other duties payable upon the

 

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sale, issuance or delivery of the Securities to the Underwriters, (iii) the fees and disbursements of the Company’s counsel, accountants and other advisers, (iv) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(a)(v) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto (not to exceed $50,000, together with the fees of counsel described under (viii) of this Section), (v) the printing and delivery to the Underwriters of copies of each preliminary prospectus, each Issuer Free Writing Prospectus and the Prospectus and any amendments or supplements thereto and any costs associated with electronic delivery of any of the foregoing by the Underwriters to investors, (vi) the fees and expenses of any transfer agent or registrar for the Securities, (vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the Securities, including without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged by the Company in connection with the road show presentations, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and 50% (fifty percent) of the cost of aircraft and black car transportation chartered in connection with the road show (and the remaining 50% (fifty percent) of such aircraft and black car costs shall be paid by the Underwriters), (viii) the filing fees incident to, and the reasonable fees and disbursements of counsel to the Underwriters in connection with, the review by FINRA of the terms of the sale of the Securities (subject to the limitation of (iv) of this Section above) (ix) the fees and expenses incurred in connection with the listing of the Securities on the NASDAQ Global Market (x) the costs and expenses (including, without limitation, any damages or other amounts payable in connection with legal or contractual liability) associated with the reforming of any contracts for sale of the Securities made by the Underwriters caused by a breach of the representation contained in the third sentence of Section 1(a)(ii), (xi) the reasonable fees and expenses incurred by the QIU acting in such capacity and (xii) all costs and expenses of the Underwriters, including the reasonable fees and disbursements of counsel for the Underwriters, in connection with matters related to the Reserved Securities which are designated by the Company for sale to Invitees; it being understood, however, that other than as set forth above in this Section 4(a) and as set forth below in Section 4(c), the Underwriters will pay all of their costs and expenses, including fees and disbursements, of their counsel other than in relation to matters described in (xii) above.

 

(b)           Expenses of the Selling Shareholder.  The Selling Shareholder will pay all expenses incident to the performance of their respective obligations under, and the consummation of the transactions contemplated by, this Agreement, including (i) any stamp and other duties and stock and other transfer taxes, if any, payable upon the sale of the Securities to the Underwriters and their transfer between the Underwriters pursuant to an agreement between such Underwriters, and (ii) the fees and disbursements of its counsel and other advisors.

 

(c)           Termination of Agreement.  If this Agreement is terminated by the Representatives in accordance with the provisions of Section 5, Section 9(a)(i) or Section 9(a)(iii) hereof, the Company and the Selling Shareholder shall reimburse the Underwriters for all of their reasonable out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters.

 

(d)           Allocation of Expenses.  The provisions of this Section shall not affect any agreement that the Company and the Selling Shareholder may make for the sharing of such costs and expenses.

 

SECTION 5.           Conditions of Underwriters’ Obligations.  The obligations of the several Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company and the Selling Shareholder contained herein or in certificates of any officer of the Company or any of its subsidiaries or on behalf of the Selling Shareholder delivered pursuant to the provisions hereof, to the

 

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performance by the Company and the Selling Shareholder of their respective covenants and other obligations hereunder, and to the following further conditions:

 

(a)           Effectiveness of Registration Statement; Rule 430A Information.  The Registration Statement, including any Rule 462(b) Registration Statement, has become effective and at Closing Time no stop order suspending the effectiveness of the Registration Statement or any post effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, threatened.  The Company has complied with each request (if any) from the Commission for additional information with respect to the offering of the Securities.  A prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b) without reliance on Rule 424(b)(8) or a post-effective amendment providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A.

 

(b)           Opinion of Counsel for Company.  At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Willkie Farr & Gallagher LLP, counsel for the Company, in form and substance reasonably satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters to the effect set forth in Exhibit A hereto and to such further effect as counsel to the Underwriters may reasonably request.

 

(c)           Opinion of Counsel for the Selling Shareholder.  At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Willkie Farr & Gallagher LLP, counsel for the Selling Shareholder, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters to the effect set forth in Exhibit B hereto and to such further effect as counsel to the Underwriters may reasonably request.

 

(d)           Opinion of Counsel for Underwriters.  At Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Sidley Austin LLP, counsel for the Underwriters, with respect to such matters as the Underwriters may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.  Such counsel may state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials.

 

(e)           Officers’ Certificate.  At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the General Disclosure Package or the Prospectus, any Material Adverse Effect, and the Representatives shall have received a certificate of the Chief Executive Officer or Chief Operating Officer of the Company and of the chief financial or chief accounting officer of the Company, dated as of Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties of the Company in this Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (iii) the Company has complied in all material respects with all agreements and satisfied all conditions on its part to be performed or satisfied under this Agreement at or prior to the Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement under the 1933 Act has been issued, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to their knowledge, threatened.

 

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(f)            Certificate of the Managing Member of the Selling Shareholder.  At the Closing Time, the Representatives shall have received a certificate of the managing member of the Selling Shareholder, dated the Closing Time, to the effect that (i) the representations and warranties of the Selling Shareholder in this Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Time and (ii) the Selling Shareholder has complied with all agreements and all conditions on its part to be performed under this Agreement at or prior to the Closing Time.

 

(g)           Accountant’s Comfort Letter.  At the time of the execution of this Agreement, the Representatives shall have received from PricewaterhouseCoopers LLP and Ernst & Young LLP letters, dated such date, in form and substance satisfactory to the Representatives, together with signed or reproduced copies of such letters for each of the other Underwriters containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the General Disclosure Package and the Prospectus.

 

(h)           Bring-down Comfort Letter.  At the Closing Time, the Representatives shall have received from PricewaterhouseCoopers LLP and Ernst & Young LLP letters, dated as of the Closing Time, to the effect that they each reaffirm the statements made in their respective letters furnished pursuant to subsection (g) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time.

 

(i)          Approval of Listing.  At the Closing Time, the Securities shall have been approved for listing on the NASDAQ Global Market, subject only to official notice of issuance.

 

(j)          No Objection.  FINRA has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements relating to the offering of the Securities.

 

(k)         Lock-up Agreements.  At the date of this Agreement, the Representatives shall have received agreements substantially in the forms of Exhibit C and Exhibit D hereto signed by the persons listed on Schedule C hereto, as applicable.

 

(l)            Conditions to Purchase of Option Securities.  In the event that the Underwriters exercise their option provided in Section 2(b) hereof to purchase all or any portion of the Option Securities, the representations and warranties of the Company and the Selling Shareholder contained herein and the statements in any certificates furnished by the Company and any of its subsidiaries and the Selling Shareholder hereunder shall be true and correct as of each Date of Delivery and, at the relevant Date of Delivery, the Representatives shall have received:

 

(i)            Officers’ Certificate.  A certificate, dated such Date of Delivery, of the Chief Executive Officer or Chief Operating Officer of the Company and of the chief financial or chief accounting officer of the Company confirming that the certificate delivered at the Closing Time pursuant to Section 5(d) hereof remains true and correct as of such Date of Delivery.

 

(ii)           Opinion of Counsel for Company.  If requested by the Representatives, the favorable opinion of Willkie Farr & Gallagher LLP, counsel for the Company, in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(b) hereof.

 

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(iii)          Opinion of Counsel for Underwriters.  If requested by the Representatives, the favorable opinion of Sidley Austin LLP, counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(c) hereof.

 

(v)           Bring-down Comfort LetterIf requested by the Representatives, letters from PricewaterhouseCoopers LLP and Ernst & Young LLP, in form and substance satisfactory to the Representatives and dated such Date of Delivery, substantially in the same form and substance as the letters furnished to the Representatives pursuant to Section 5(h) hereof, except that the “specified date” in the letters furnished pursuant to this paragraph shall be a date not more than three business days prior to such Date of Delivery.

 

(m)          Additional Documents.  At the Closing Time (and at each Date of Delivery, if any Option Securities are purchased) counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters.

 

(n)           Termination of Agreement.  If any condition specified in this Section shall not have been waived by the Representatives or fulfilled when and as required to be fulfilled, this Agreement, or, in the case of any condition to the purchase of Option Securities on a Date of Delivery which is after the Closing Time, the obligations of the several Underwriters to purchase the relevant Option Securities, may be terminated by the Representatives by written notice to the Company and the Selling Shareholder at any time at or prior to Closing Time or such Date of Delivery, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7, 8, 15 and 16 shall survive any such termination and remain in full force and effect.

 

SECTION 6.           Indemnification.

 

(a)           Indemnification of Underwriters.  The Company agrees to indemnify and hold harmless each Underwriter, its affiliates (as such term is defined in Rule 501(b) under the 1933 Act (each, an “Affiliate”)), its selling agents and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

 

(i)            against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430A Information, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

 

(ii)           against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged

 

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untrue statement or omission; provided that (subject to Section 6(e) below) any such settlement is effected with the written consent of the Company;

 

(iii)          against any and all expense whatsoever, as incurred (including the reasonable fees and disbursements of counsel chosen by Merrill Lynch), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;

 

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement (or any amendment thereto), including the Rule 430A Information, or any preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriter Information.

 

Insofar as this indemnity agreement may permit indemnification for liabilities under the 1933 Act of any person who is a partner of an Underwriter or who controls an underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and who, at the date of this Agreement, is a director or officer of the Company or controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, such indemnity agreement is subject to the undertaking of the Company in the Registration Statement under Item 14.

 

(b)           Indemnification of Underwriters by Selling Shareholder.  The Selling Shareholder agrees to indemnify and hold harmless each Underwriter, its Affiliates and selling agents and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 430A Information, any preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Selling Shareholder Information.

 

(c)           Indemnification of Company, Directors and Officers and Selling Shareholder.  Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and the Selling Shareholder and each person, if any, who controls the Selling Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 430A Information, any preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriter Information.

 

(d)           Actions against Parties; Notification.  Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially

 

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prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement.  In the case of parties indemnified pursuant to Section 6(a) and 6(b) above, counsel to the indemnified parties shall be selected by Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(c) above, counsel to the indemnified parties shall be selected by the Company.  An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party.  In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances; provided, that, if indemnity is sought pursuant to Section 6(f), then, in addition to the reasonable fees and expenses of such counsel for the indemnified parties, the indemnifying party shall be liable for the reasonable fees and expenses of not more than one counsel (in addition to any local counsel) separate from its own counsel and that of the other indemnified parties for the QIU in its capacity as a “qualified independent underwriter” and all persons, if any, who control the QIU within the meaning of Section 15 of the 1933 Act or Section 20 of 1934 Act in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances if, in the reasonable judgment of the QIU, there may exist a conflict of interest between the QIU and the other indemnified parties.  Any such separate counsel for the QIU and such control persons of the QIU shall be designated in writing by the QIU.  No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

(e)           Settlement without Consent if Failure to Reimburse.  If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel for which such party is entitled to be reimbursed in accordance with this Section 6, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) or settlement of any claim in connection with any violation referred to in Section 6(g) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

 

(f)            Indemnification of QIU.  In addition to and without limitation of the Company’s obligation to indemnify Merrill Lynch as an Underwriter, the Company also agrees to indemnify and hold harmless the QIU, its Affiliates and selling agents and each person, if any, who controls the QIU within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all loss, liability, claim, damage and expense whatsoever, as incurred, incurred as a result of the QIU’s participation as a “qualified independent underwriter” within the meaning of Rule 2720 in connection with the offering of the Securities.

 

(g)           Indemnification for Reserved Securities.  In connection with the offer and sale of the Reserved Securities, the Company agrees to indemnify and hold harmless the Underwriters, their Affiliates and selling agents and each person, if any, who controls any Underwriter within the meaning of

 

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either Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all loss, liability, claim, damage and expense (including, without limitation, any legal or other expenses reasonably incurred in connection with defending, investigating or settling any such action or claim), as incurred, (i) arising out of the violation of any applicable laws or regulations of foreign jurisdictions where Reserved Securities have been offered, (ii) arising out of any untrue statement or alleged untrue statement of a material fact contained in any prospectus wrapper or other material prepared by or with the consent of the Company for distribution to Invitees in connection with the offering of the Reserved Securities or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) caused by the failure of any Invitee to pay for and accept delivery of Reserved Securities which have been orally confirmed for purchase by any Invitee by       [A.M.][P.M.] (New York City time) on the first business day after the date of the Agreement or (iv) related to, or arising out of or in connection with, the offering of the Reserved Securities.

 

(h)           Other Agreements with Respect to Indemnification.  The provisions of this Section shall not affect any agreement among the Company and the Selling Shareholder with respect to indemnification.

 

SECTION 7.           Contribution.  If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Shareholder, on the one hand, and the Underwriters, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Selling Shareholder, on the one hand, and of the Underwriters, on the other hand, in connection with the statements or omissions, or in connection with any violation of the nature referred to in Section 6(g) hereof, which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

 

The relative benefits received by the Company and the Selling Shareholder, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the Selling Shareholder, on the one hand, and the total underwriting discount received by the Underwriters, on the other hand, in each case as set forth on the cover of the Prospectus, bear to the aggregate initial public offering price of the Securities as set forth on the cover of the Prospectus.

 

The relative fault of the Company and the Selling Shareholder, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company and the Selling Shareholder or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or violation of the nature referred to in Section 6(g) hereof.

 

The Company, the Selling Shareholder and the Underwriters agree that Merrill Lynch will not receive any additional benefits hereunder for serving as the QIU in connection with the offering and sale of the Securities.

 

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The Company, the Selling Shareholder and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7.  The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

 

Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.

 

No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Underwriter’s Affiliates and selling agents shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company or the Selling Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company or the Selling Shareholder, as the case may be.  The Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Initial Securities set forth opposite their respective names in Schedule A hereto and not joint.

 

The provisions of this Section shall not affect any agreement between the Company and the Selling Shareholder with respect to contribution.

 

SECTION 8.           Representations, Warranties and Agreements to Survive.  All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of its subsidiaries or the Selling Shareholder submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers or directors, any person controlling the Company or any person controlling the Selling Shareholder and (ii) delivery of and payment for the Securities.

 

SECTION 9.           Termination of Agreement.

 

(a)           Termination.  The Representatives may terminate this Agreement, by written notice to the Company, at any time at or prior to the Closing Time (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the General Disclosure Package or the Prospectus, any Material Adverse Effect, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representative, impracticable or inadvisable

 

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to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the NASDAQ Global Market, or (iv) if trading generally on the American Stock Exchange or the New York Stock Exchange or in the NASDAQ Global Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by order of the Commission, FINRA or any other governmental authority, or (v) a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States or (vi) if a banking moratorium has been declared by either Federal or New York authorities.

 

(b)           Liabilities.  If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7, 8, 15 and 16 shall survive such termination and remain in full force and effect.

 

SECTION 10.         Default by One or More of the Underwriters.  If one or more of the Underwriters shall fail at Closing Time (or a Date of Delivery, if any Option Securities are purchased) to purchase the Securities which it or they are obligated to purchase under this Agreement (the “Defaulted Securities”), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24-hour period, then:

 

(i)            if the number of Defaulted Securities does not exceed 10% of the number of Securities to be purchased on such date, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or

 

(ii)           if the number of Defaulted Securities exceeds 10% of the number of Securities to be purchased on such date, this Agreement or, with respect to any Date of Delivery which occurs after the Closing Time, the obligation of the Underwriters to purchase, and the Company to sell, the Option Securities to be purchased and sold on such Date of Delivery shall terminate without liability on the part of any non-defaulting Underwriter.

 

No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default.

 

In the event of any such default which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the Closing Time, which does not result in a termination of the obligation of the Underwriters to purchase and the Company to sell the relevant Option Securities, as the case may be, either the (i) Representatives or (ii) the Company and the Selling Shareholder shall have the right to postpone Closing Time or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration Statement, the General Disclosure Package or the Prospectus or in any other documents or arrangements.  As used herein, the term “Underwriter” includes any person substituted for an Underwriter under this Section 10.

 

SECTION 11.         Default by the Selling Shareholder or the Company.  (a) If the Selling Shareholder shall fail at the Closing Time or a Date of Delivery, as the case may be, to sell and deliver the number of Securities which the Selling Shareholder is obligated to sell hereunder, then the Underwriters

 

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may, at option of the Representatives, by notice from the Representatives to the Company, either (i) terminate this Agreement without any liability on the fault of any non-defaulting party except that the provisions of Sections 1, 4, 6, 7, 8, 15 and 16 shall remain in full force and effect or (ii) elect to purchase the Securities which the Company has agreed to sell hereunder.  No action taken pursuant to this Section 11 shall relieve the Selling Shareholder so defaulting from liability, if any, in respect of such default.

 

In the event of a default by the Selling Shareholder as referred to in this Section 11, each of the Representatives and the Company shall have the right to postpone the Closing Time or any Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required change in the Registration Statement, the General Disclosure Package or the Prospectus or in any other documents or arrangements.

 

(b)           If the Company shall fail at the Closing Time or a Date of Delivery, as the case may be, to sell the number of Securities that it is obligated to sell hereunder, then this Agreement shall terminate without any liability on the part of any non-defaulting party; provided, however, that the provisions of Sections 1, 4, 6, 7, 8, 15 and 16 shall remain in full force and effect.  No action taken pursuant to this Section shall relieve the Company from liability, if any, in respect of such default.

 

SECTION 12.         Notices.  All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication.  Notices to the Underwriters shall be directed to Merrill Lynch at One Bryant Park, New York, New York 10036, attention of Syndicate Department, with a copy to ECM Legal; notices to the Company shall be directed to it at Cowen Group, Inc., 599 Lexington Avenue, New York, NY 10022 attention of J. Kevin McCarthy, Esq.; notices to the Selling Shareholder shall be directed to it at RCG Holdings LLC, c/o Cowen Group, Inc. 599 Lexington Avenue, New York, NY 10022, Attention: Managing Member.

 

SECTION 13.         No Advisory or Fiduciary Relationship.  Each of the Company and the Selling Shareholder acknowledges and agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the public offering price of the Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Company and the Selling Shareholder, on the one hand, and the several Underwriters, on the other hand, (b) in connection with the offering of the Securities and the process leading thereto, each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company, any of its subsidiaries or the Selling Shareholder, or its respective stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company or the Selling Shareholder with respect to the offering of the Securities or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company, any of its subsidiaries or the Selling Shareholder on other matters) and no Underwriter has any obligation to the Company or the Selling Shareholder with respect to the offering of the Securities except the obligations expressly set forth in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of each of the Company and the Selling Shareholder and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering of the Securities and the Company and the Selling Shareholder has consulted its own respective legal, accounting, regulatory and tax advisers to the extent it deemed appropriate.

 

SECTION 14.         Parties.  This Agreement shall each inure to the benefit of and be binding upon the Underwriters, the Company and the Selling Shareholder and their respective successors.  Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or

 

29



 

corporation, other than the Underwriters, the Company and the Selling Shareholder and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained.  This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters, the Company and the Selling Shareholder and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation.  No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.

 

SECTION 15.         Trial by Jury.  The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates), the Selling Shareholder and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

SECTION 16.         GOVERNING LAW.  THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF, THE STATE OF NEW YORK.

 

SECTION 17.         TIME.  TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT.  EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

 

SECTION 18.         Partial Unenforceability.  The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof.  If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

 

SECTION 19.         Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.

 

SECTION 20.         Effect of Headings.  The Section headings herein are for convenience only and shall not affect the construction hereof.

 

30



 

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company and the Selling Shareholder a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the Underwriters, the Company and the Selling Shareholder in accordance with its terms.

 

 

 

 

Very truly yours,

 

 

 

 

 

COWEN GROUP, INC.

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

RCG HOLDINGS LLC

 

 

By: C4S & Co., L.L.C., its Managing Member

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

31



 

CONFIRMED AND ACCEPTED,

 

 

 

as of the date first above written:

 

 

 

 

 

 

 

MERRILL LYNCH, PIERCE, FENNER & SMITH

 

 

 

INCORPORATED

 

 

 

COWEN AND COMPANY, LLC

 

 

 

CREDIT SUISSE SECURITIES (USA) LLC

 

 

 

SANDLER O’NEILL & PARTNERS, L.P.

 

 

 

 

 

 

 

By: COWEN AND COMPANY, LLC

 

 

 

 

 

 

 

By

 

 

 

 

Authorized Signatory

 

 

 

 

 

 

 

By: MERRILL LYNCH, PIERCE, FENNER & SMITH

 

 

 

INCORPORATED

 

 

 

 

 

 

 

By

 

 

 

 

Authorized Signatory

 

 

 

 

 

 

 

By: CREDIT SUISSE SECURITIES (USA) LLC

 

 

 

 

 

 

 

By

 

 

 

 

Authorized Signatory

 

 

 

 

 

 

 

By: SANDLER O’NEILL & PARTNERS CORP., THE SOLE GENERAL PARTNER OF SANDLER O’NEILL & PARTNERS, L.P.

 

 

 

 

By

 

 

 

 

Authorized Signatory

 

 

 

 

 

For themselves and as Representatives of the other Underwriters named in Schedule A hereto.

 

32


 



Exhibit 4.1

 

By AUTHORIZED SIGNATURE THIS CERTIFIES THAT is the owner of CUSIP DATED COUNTERSIGNED AND REGISTERED: COMPUTERSHARE TRUST COMPANY, N.A. TRANSFER AGENT AND REGISTRAR, Fully-Paid and Non Assessable Shares of Class A Common Stock, $0.01 par value, of Cowen Group, Inc. (hereinafter called the “Company”), transferable on the books of the Company by the holder hereof in person or by duly authorized attorney, upon surrender of this certificate properly endorsed. This certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar. Witness, the seal of the Company and the signatures of its duly authorized officers. CLASS A COMMON STOCK PAR VALUE $0.01 CLASS A COMMON STOCK THIS CERTIFICATE IS TRANSFERABLE IN CANTON, MA AND NEW YORK, NY SEE REVERSE FOR CERTAIN DEFINITIONS Certificate Number Shares COWEN GROUP, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE 016570| 003590|127C|RESTRICTED||4|057-423 223622 10 1 <<Month Day, Year>> * * 600620* * * * * * * * * 600620* * * * * * * * * 600620* * * * * * * * * 600620* * * * * * * * * 600620* * ** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Alexander David Sample **** Mr. Sample **** Mr. Sample **600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares*** *600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares**** 600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****6 00620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****60 0620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600 620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares***600620**Shares****600620**Shares****60062 0**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620 **Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620* *Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620** Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**S hares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Shares****600620**Sh * * * SIX HUNDRED THOUSAND SIX HUNDRED AND TWENTY* * * MR. SAMPLE & MRS. SAMPLE & MR. SAMPLE & MRS. SAMPLE ZQ 000000 Certificate Numbers 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 1234567890/1234567890 Total Transaction Num/No. 123456 Denom. 123456 Total 1234567 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 PO BOX 43004, Providence, RI 02940-3004 CUSIP XXXXXX XX X Holder ID XXXXXXXXXX Insurance Value 1,000,000.00 Number of Shares 123456 DTC 12345678 123456789012345

 

 

For value received, hereby sell, assign and transfer unto shares Attorney Dated: 20 Signature: Signature: Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) of the capital stock represented by the Certificate, and do hereby irrevocably constitute and appoint to transfer the said stock on the books of the Corporation with full power of substitution in the premises. . COWEN GROUP, INC. The Corporation will furnish without charge to each stockholder who so requests a statement of the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Signature(s) Guaranteed: Medallion Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian (Cust) (Minor) TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act (State) JT TEN - as joint tenants with right of survivorship UNIF TRF MIN ACT - Custodian (until age ) (Cust) under Uniform Transfers to Minors Act (Minor) (State) Additional abbreviations may also be used though not in the above list.

 

 



Exhibit 5.1

 

 

787 Seventh Avenue

 

New York, NY 10019-6099

 

Tel: 212 728 8000

 

Fax: 212 728 8111

 

December 14, 2009

 

Cowen Group, Inc.

599 Lexington Avenue

New York, New York 10022

 

Re:          Cowen Group, Inc. — Public Offering of Common Stock

 

Ladies and Gentlemen:

 

We have acted as counsel to Cowen Group, Inc., a corporation organized under the laws of the State of Delaware (the “Company”), in connection with the preparation of a Registration Statement on Form S-1 (Registration No. 333-163372) (as amended, the “Registration Statement”) relating to (i) the offer and sale by the Company of 17,280,000 shares (the “Company Shares”) of Class A common stock of the Company, par value $0.01 per share (“Common Stock”), including 2,280,000 shares subject to the exercise of the underwriters’ over-allotment option, and (ii) the offer and sale by RCG Holdings LLC of 200,000 shares (the “Selling Stockholder Shares”) of Common Stock.

 

We have examined copies of the Amended and Restated Certificate of Incorporation of the Company, as amended, and the Amended and Restated By-Laws of the Company, the Registration Statement, all resolutions adopted by the Company’s Board of Directors, and other records and documents that we have deemed necessary for the purpose of this opinion.  We have also examined such other documents, papers, statutes and authorities as we have deemed necessary to form a basis for the opinion hereinafter expressed.

 

In our examination, we have assumed the genuineness of all signatures and the conformity to original documents of all copies submitted to us.  As to various questions of fact material to our opinion, we have relied on statements and certificates of officers and representatives of the Company and public officials.

 

Based on the foregoing, and subject to the qualifications and limitations set forth below, we are of the opinion that:

 

1.                                       The Company is validly existing as a corporation in good standing under the laws of the State of Delaware.

 

2.                                       When the Registration Statement has become effective under the Securities Act of 1933, as amended (the “Act”), (a) the Company Shares, when duly issued, sold and paid for, and (b) the

 

NEW YORK  WASHINGTON  PARIS  LONDON  MILAN  ROME  FRANKFURT  BRUSSELS

 



 

Cowen Group, Inc.

December 14, 2009

Page 2

 

Selling Stockholder Shares, when sold and paid for, in each case in accordance with the terms of the prospectus included as part of the Registration Statement, will be validly issued, fully paid and non-assessable.

 

This opinion is limited to the laws of the State of New York, the General Corporation Law of the State of Delaware and the federal laws of the United States of America.

 

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us in the prospectus included as part of the Registration Statement.  In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act.

 

 

Very truly yours,

 

 

/s/ Willkie Farr & Gallagher LLP

 

2




Exhibit 10.8

 

EXECUTION COPY

 

June 3, 2009

 

David M. Malcolm

At the address last on the records of Cowen

 

Dear Greg:

 

As you know, Cowen Group, Inc. (“Cowen”) has entered into a Transaction Agreement and Agreement and Plan of Merger (the “Transaction Agreement”) with LexingtonPark Parent Corp. (the “Company”), Lexington Merger Corp., Park Exchange LLC (the “Exchange Sub”), and Ramius LLC (“Ramius”), pursuant to which, among other things, Cowen will become a wholly owned subsidiary of the Company and Exchange Sub will acquire substantially all of the assets and assume all of the liabilities of Ramius (collectively, the “Transaction”). The Company and Cowen desire to have your continued dedication and service pending and following the Transaction. Accordingly, we are pleased to offer you continued employment with the Company and its subsidiaries, and we look forward to continuing our mutually rewarding and beneficial relationship. This letter agreement (the “Agreement”) will outline the terms of your continued employment. This Agreement will become effective upon the Effective Time (as defined in the Transaction Agreement) (the “Effective Date”) and, as more fully set forth below, shall, as of the Effective Date, supersede any and all prior employment agreements and letters concerning your employment with Cowen and its subsidiaries, including, without limitation the Employment Agreement by and between Cowen and Company, LLC and you, dated as of March 4, 2008 (the “Previous Employment Agreement”).

 

1.                                            Term. This Agreement provides the details of the terms of your employment from and following the Effective Date until termination of your employment (the “Term”), and certain other terms and conditions of your employment with the Company and its subsidiaries that continue beyond the Term unless otherwise specified.

 

2.                                            Position. You shall be employed as the Chief Executive Officer and President of the Company’s Broker-Dealer Subsidiary (the “BD Subsidiary”) and shall report directly to the Chief Executive Officer of the Company. You shall also be appointed, on the Effective Date, to serve as a member of the Board of Directors of the Company and as a member of the Company’s Executive Management Committee and the Company’s Operating Committee. You shall have the duties, responsibilities and authority commensurate with your title and position and such other duties and responsibilities as may be reasonably assigned to you by the Chief Executive Officer of the Company, including (a) the responsibility of making non-binding recommendations to the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) to assist such committee in making compensation decisions relating to senior management of the BD Subsidiary and (b) the responsibility, in consultation with the Chief Executive Officer of the Company, for determining the compensation of the employees of the BD Subsidiary whose compensation is not determined by the Compensation

 



 

Committee. You shall continue to be subject to, and must comply with, all policies and procedures applicable to employees of the BD Subsidiary, as now existing or as may be modified or supplemented from time to time by the BD Subsidiary.

 

3.                                       Compensation and Benefits.

 

(a)                                       Base Salary.  You will be paid a base salary at the rate of not less than Four Hundred Fifty Thousand Dollars ($450,000) per annum (“Base Salary”), payable in accordance with the Company’s prevailing payroll practices but no less frequently than monthly. The term Base Salary as utilized in this Agreement shall refer to Base Salary as in effect from time to time, including any increases. Except as otherwise provided in this Agreement, any obligation to pay your Base Salary will cease upon the termination of your employment.

 

(b)                                      Annual Bonus.  For each calendar year during which you are employed by the Company (excluding any period in which you are employed as a Senior Advisor, as defined below), you shall be entitled to earn an annual performance-based bonus pursuant to a Company bonus plan as determined by the Compensation Committee. The total annual bonus that may be earned by you for any calendar year is referred to herein as the “Annual Bonus.” Your Annual Bonus shall be determined by the Compensation Committee consistently with and on the same basis as, and shall have terms and conditions no less favorable than those that apply to, other similarly situated executives of the Company, provided that you shall be entitled to a minimum Annual Bonus equal to Two Hundred Thousand Dollars ($200,000) for each completed calendar year ending during the Term (excluding any Notice Period, as defined below, upon a voluntary termination without Good Reason, as defined below). Your Annual Bonuses may, at the discretion of the Compensation Committee, and consistent with similarly situated executives of the Company, include a certain percentage of restricted securities, other stock or security-based awards or deferred cash or other deferred compensation.

 

(c)                                       Benefits.  During the Term, you will be entitled to employee benefits, fringe benefits and perquisites consistent with, and on the same basis as, similarly situated executives of the Company, subject to the terms of the Transaction Agreement, including, without limitation, the provisions contained in Section 7.6 thereof.

 

(d)                                      Expense Reimbursement.  During the Term, the Company shall reimburse you for all reasonable expenses incurred by you in the performance of your duties in accordance with the Company’s policies applicable to similarly situated executives of the Company. All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

(e)                                       Vacation.  During the Term, you shall be eligible for paid-time off in accordance with the BD Subsidiary’s vacation policy.

 

2



 

(f)                                              Effective Date Payment.  You will become vested on the Effective Date in the right to be paid One Million Five Hundred Thousand Dollars ($1,500,000) (the “Effective Date Payment”). The Effective Date Payment will be paid to you in a single lump sum in cash on the Effective Date.

 

(g)                                           CHRP Interest.  On March 14, 2008, you were admitted as a member of Cowen Healthcare Royalty GP, LLC (“GP LLC”), such that your interest in GP LLC equals six and one-quarter percent (6.25%) as of such date. Your interest in GP LLC relates only to the initial Cowen Healthcare Royalty Partners fund (the “Healthcare Fund”). Such membership interest in GP LLC is referred to herein as the “CHRP Interest.” At the time you were admitted as a member of GP LLC, you purchased your interest in GP LLC from Cowen Capital Partners II, LLC (“CCP II”) at a price equal to the aggregate amount paid by CCP II as of that date relating to the interest so purchased. You are obligated to make all future payments and contributions relating to capital calls by the Healthcare Fund and are entitled to receive all future distributions. The CHRP Interest vested with regard to fifty percent (50%) on January 1, 2009 and, except as otherwise provided in paragraph 5 hereof, the remaining fifty percent (50%) shall vest on January 1, 2010.

 

4.                                       Restricted Stock Award.

 

(a)                                       Award.  The Company will grant you, effective as of the Effective Date, 288,832 restricted shares of Company common stock (“Common Stock”) (the “Restricted Stock Award”) on the terms and conditions set forth in this paragraph 4; provided, however, if as of the Effective Date, the Company’s shareholders have not approved an amendment or a successor plan to the Cowen Group, Inc. 2007 Equity and Incentive Plan and the Cowen Group, Inc. 2006 Equity and Incentive Plan (together, the “Cowen Plan”) and there are not sufficient shares under the Cowen Plan to grant you the entire amount of shares of Common Stock subject to the Restricted Stock Award, you will be granted a “Pro-Rata Restricted Stock Award” on the Effective Date. For purposes of this Agreement, a “Pro-Rata Restricted Stock Award” means that number of restricted shares of Common Stock equal to the product of (i) (x) the total number of shares of Common Stock subject to your Restricted Stock Award, divided by (y) the total number of shares of Common Stock subject to similar restricted stock awards or restricted stock unit awards to be granted on the Effective Date and (ii) the total number of shares of Common Stock available for grant under the Cowen Plan on the Effective Date.

 

(b)                                      Failure to Grant the Entire Restricted Stock Award on the Effective Date.  In the event that the Company has not granted you the entire Restricted Stock Award on the Effective Date, the Company shall, by July 1, 2010, grant you any theretofore ungranted portion of the Restricted Stock Award; provided, however, if there are insufficient shares to grant you such ungranted portion of the Restricted Stock Award, the Company shall instead, in no event later than July 1, 2010, grant you the right to receive an amount in cash equal to Two Million Five Hundred Thousand Dollars ($2,500,000), less the Effective Date value of the Pro-Rata

 

3



 

Restricted Stock Award and any other portion of the Restricted Stock Award, if any, previously granted to you (such cash award, the “Cash Makeup Award”).

 

(c)                                       Vesting.  The Restricted Stock Award (or the Cash Makeup Award, as applicable) shall vest and become free of restrictions in two equal installments on each of the second and third anniversaries of the Effective Date, provided that you are employed by the Company or a subsidiary thereof and have not yet given notice to terminate your employment without Good Reason (as set forth in paragraph 6 below) as of such date. Notwithstanding the foregoing, any theretofore unvested portion of the Restricted Stock Award (or the Cash Makeup Award, as applicable) shall immediately vest in full and become free of restriction (and, in the case of the Cash Makeup Award, be paid in cash within thirty (30) days of the date of termination), in the event that, (i) your employment is terminated (x) by the Company other than for Cause (as defined below), (y) due to your death or Disability (as defined below) or (z) by you for Good Reason (as defined below) or (ii) a Change in Control of the Company (as defined in the Cowen Group, Inc. 2007 Equity and Incentive Plan, as may be revised to reflect the structure of the Company following the Transaction) occurs after the Effective Date (each of the events in clauses (i) and (ii), an “Accelerated Vesting Event”). In the event that an Accelerated Vesting Event occurs prior to the Company having granted you any portion of the Restricted Stock Award or the Cash Makeup Award, as applicable, you shall vest in full in, and be paid in cash within thirty (30) days of the date of termination (or, in the event of a Change in Control, on the date of such Change in Control), an amount in cash equal to the theretofore ungranted portion of the Restricted Stock Award.

 

(d)                                      Registration.  As of the Effective Date, the Company shall, at its expense, reserve for issuance a number of shares of Common Stock at least equal to the number of shares of Common Stock that will be subject to the Restricted Stock Award and shall, as soon as reasonably possible after the Effective Date, file a registration statement on Form S-8 (or any successor form, or if Form S-8 is not available, other appropriate forms) with respect to the shares of Common Stock subject to the Restricted Stock Award. The Company shall thereafter maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as you hold the Restricted Stock Award (or any portion thereof) or any of the shares of Common Stock that were previously subject to the Restricted Stock Award, or until such earlier date as such Restricted Stock Award and shares of Common Stock, as applicable, may otherwise be freely sold under applicable law.

 

(e)                                       Other Terms of Restricted Stock Award; Form of Agreement.  The terms of your Restricted Stock Award will be evidenced in an award agreement by and between you and the Company, which will be substantially in the same form as (and shall in no event contain terms less favorable to you than those contained in) the “Form of 2007 Equity Award Agreement for Executive Officers” filed as Exhibit 10.25 to the Cowen Group, Inc. Form 10-K for the year ended December 31, 2008, provided that such award agreement will be modified to incorporate

 

4



 

the terms of this Agreement (including, without limitation, the defined terms contained herein and the restrictive covenants set forth herein) which shall, in any event, control.

 

5.                                       Termination of Employment.

 

(a)                                  By the Company Other than for Death, Disability or for Cause; By You for Good Reason.  If your employment is terminated (i) by the Company for any reason other than due to (x) your death or Disability (as defined below) or (y) for Cause (as defined below) or (ii) by you upon resignation for Good Reason (as defined below), you shall be entitled to receive (A) that portion of your Base Salary earned, but unpaid as of the date of termination, paid within thirty (30) days of the date of your termination, (B) any Annual Bonus earned by you for a prior completed calendar year to the extent not theretofore paid and not theretofore deferred (with any such deferred amounts to be paid in accordance with and at the times set forth in the applicable deferral arrangement) paid at the same time as all other Company annual bonuses are paid for the year in which your employment terminates, but in no event later than March 15 of the calendar year following the year in which your employment terminates (the amounts described in clauses (A) and (B), and the times at which such amounts are paid, shall be hereinafter referred to as the “Accrued Obligations”); (C) your rights and interests in the CHRP Interest shall immediately vest, (D) you shall be entitled to receive a lump sum cash payment (the “Separation Payment”) equal to the sum of (x) Two Million Two Hundred Fifty Thousand Dollars ($2,250,000), (y) your Base Salary as of the end of the calendar year immediately preceding the calendar year in which such termination occurs, and (z) the cash portion of your Annual Bonus in respect of the calendar year immediately preceding the calendar year in which such termination occurs, and (E) in addition to any rights you have with respect to the Restricted Stock Award under paragraph 4 of this Agreement, (1) any outstanding equity awards shall become fully vested and exercisable and any restrictions thereon shall lapse effective as of your date of termination (provided that any delays in payment or settlement set forth in such grant or award agreements that are required under Section 409A shall remain effective) and (2) any stock options outstanding as of your date of termination shall remain exercisable for the remainder of the respective terms of such stock options (taking into account any provisions of the equity incentive plan or option agreements that cause them to expire or be replaced in connection with changes in control or similar events) (clauses (1) and (2) collectively referred to herein as the “Equity Benefits”). In order to receive the Separation Payment, you will also be required to sign a Settlement Agreement and Release of the Company in a form customarily used by the BD Subsidiary, which will include a general release of known and unknown claims, provisions relating to return of Company property and non-disparagement and a requirement to cooperate regarding any future litigation (the “Release”) within fifty-two (52) days of the date of termination of your employment (or such earlier time as may be permissible under the Release taking into account any revocation period). The Separation Payment shall be paid to you within ten (10) days following the expiration of the revocation period applicable to the Release and in no event later than sixty (60) days of the date of termination of your employment, assuming you have signed, returned to the Company and not revoked the Release. You may not both become a “Senior Advisor” (as provided in paragraph 5(b) below) and resign your employment for Good Reason. Accordingly, in the event you

 

5



 

become a Senior Advisor, you shall not be entitled to payment under this paragraph 5(a) and you shall be limited to the rights, terms and conditions set forth in paragraph 5(b) (Senior Advisor Status). Conversely, in the event you resign your employment for Good Reason, you shall not be entitled to payments as a Senior Advisor under paragraph 5(b) (Senior Advisor Status) and Appendix A hereto, and shall be limited to the rights, terms and conditions set forth in this paragraph 5(a).

 

(b)                                           Senior Advisor Status.  When by reason of your retirement in accordance with the applicable policy of the Company (which for the avoidance of doubt permits retirement on or after the attainment of age 55 with five years of service) at any time on or after the date that annual bonuses are paid by the Company in respect of the Company’s 2011 fiscal year, you cease to serve as the Chief Executive Officer and President of the BD Subsidiary (or in whatever position you then serve), provided you are otherwise an employee in good standing at that time, and continuing for a three (3) year period, the Company will employ you as a Senior Advisor pursuant to a Senior Advisor Agreement in the form attached hereto as Appendix A.

 

(c)                                            Death or Disability.  Your employment shall terminate on your death. If you become “Disabled,” the Company may terminate your employment by giving you thirty (30) days’ written notice of its intention to do so unless you return to full-time performance of your duties within such thirty (30)-day period. “Disabled” and “Disability,” as used herein, shall mean your inability to perform the essential duties and responsibilities of your job with or without reasonable accommodation, for a continuous period of ninety (90) days or more, or for one hundred twenty (120) days or more in a twelve (12)-month period, due to a physical or mental condition. Disputes on the issues of Disability shall be determined by an impartial, reputable physician agreed upon by the parties or their respective doctors. Upon termination under this paragraph 5(c), in addition to any rights you have under paragraph 4 of this Agreement, you or your estate shall (i) vest in and be entitled to retain all rights and interests in the CHRP Interest and (ii) be entitled to receive the Equity Benefits. In addition, you or your estate shall be entitled to receive the Accrued Obligations.

 

(d)                                           Termination for Cause.  The Company may terminate your employment with or without Cause. Upon termination of employment for Cause, you shall be entitled to receive only that portion of your Base Salary earned, but unpaid, as of the date of termination, payable no later than thirty (30) days after your date of termination. Upon termination of your employment for Cause, you or your estate shall be entitled to retain any amounts distributed to you in connection with your receipt of the CHRP Interest; provided, however, the entirety of your membership interest in GP LLC shall revert back to CCP II at cost, and CCP II shall promptly pay to you the sum of your membership interest payments (i.e., the amount you paid to CCP II for the interest) plus any amounts subsequently paid by you in connection with capital calls, if any, less any distributions previously received by you in respect of such membership interests. For purposes of this Agreement, “Cause” shall mean the occurrence of an event set forth in clauses (i) through (iv) below as determined by the Board of Directors of the Company in good faith:

 

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(i)                                               your conviction of any crime (whether or not related to your duties at the BD Subsidiary), with the exception of minor traffic offenses;

 

(ii)                                            fraud, dishonesty, gross negligence or substantial misconduct in the performance of your duties and responsibilities of your employment;

 

(iii)                                         your material violation of or failure to comply with the Company’s internal policies or the rules and regulations of any regulatory or self-regulatory organization with jurisdiction over the BD Subsidiary;

 

(iv)                                        your failure to perform the material duties of your position.

 

In the case of clauses (ii) through (iv) above, to the extent your alleged breach is reasonably subject to cure, your employment shall not be terminated for Cause unless and until you have been given written notice and shall have failed to correct any such violation, failure or refusal to follow instructions within ten (10) business days of such notice.

 

(e)                                  Termination By You without Good Reason.  You may terminate your employment with or without “Good Reason”. Subject to the provisions of paragraph 5(b) herein, upon termination of your employment by you without Good Reason, you shall be entitled to receive only that portion of your Base Salary earned, but unpaid, as of the effective date of termination, payable no later than thirty (30) days after the effective date of termination and to retain all rights and interests in that portion of the CHRP Interest that has vested as of the commencement of the Notice Period (defined below), but you shall not be entitled to any of the payments or benefits set forth on Appendix A hereto. For purposes of this Agreement, “Good Reason” shall mean:

 

(i)                                     any requirement that your services during the Term be rendered primarily at a location or locations other than the Company’s or the BD Subsidiary’s offices in New York, New York;

 

(ii)                                       a material diminution by the Company or the BD Subsidiary of your positions, roles and responsibilities as Chief Executive Officer and President of the BD Subsidiary or as otherwise contemplated by Section 2 of this Agreement, including the Company’s failure to appoint (or reappoint) you to serve as a member of the Company’s Board of Directors, Executive Management Committee or Operating Committee; or

 

(iii)                                    any material breach of this Agreement by the Company.

 

In order to invoke a termination for Good Reason, you must provide written notice to the Company of the existence of the conditions giving rise to such “Good Reason” within ninety (90) days following your knowledge of the initial existence of such condition or conditions, and the Company shall have thirty (30) days following receipt of such written notice (the “Cure Period”) during which

 

7



 

it may remedy the condition. In the event that the Company fails to remedy the condition constituting Good Reason during the Cure Period, you must deliver notice to the Company of your intention to terminate employment, if at all, within ninety (90) days following the Cure Period in order for such termination to constitute a termination for Good Reason.

 

(f)                                              Further Effect of Termination on Board and Officer Positions.  If your full time employment ends for any reason (including upon your becoming a Senior Advisor), you agree that you will cease immediately to hold any and all officer or director positions you then have with the Company or any subsidiary, absent a contrary direction from the Board of Directors of the Company (which may include either a request to continue such service or a direction to cease serving upon notice without regard to whether your employment has ended). You hereby irrevocably appoint the Company to be your attorney-in-fact to execute any documents and do anything in your name to effect your ceasing to serve as a director and officer of the Company and any subsidiary, should you fail to resign following a request from the Company to do so. A written notification signed by a director or duly authorized officer of the Company that any instrument, document or act falls within the authority conferred by this clause will be conclusive evidence that it does so.

 

(g)                                           No Mitigation; Offset.  In no event shall you be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to you under any of the provisions of this Agreement and such amounts shall not be reduced whether or not you obtain other employment. In the event of your termination of employment, the Company may offset, to the fullest extent permitted by law, any amounts due to the Company from you, or advanced or loaned to you by the Company, from any monies owed to you or your estate by reason of your termination, except to the extent such withholding or offset is not permitted under Section 409A without the imposition of additional taxes or penalties on you.

 

6.                                       Notice of Termination.  You shall not voluntarily (other than in connection with your becoming a Senior Advisor) terminate your employment relationship with the Company or any of its affiliates without Good Reason without first giving the Company at least one hundred eighty (180) days’ prior written notice of the effective date of your resignation or other termination (the “Notice Period”). Such written notice shall be sent by certified mail to the General Counsel of the Company at the Company’s primary New York address. The Company retains the right to waive the notice requirement in whole or in part or to place you on paid leave for all or part of the Notice Period. In the alternative, at any time after you give notice, the Company may, but shall not be obligated to, provide you with work and (a) require you to comply with such conditions as it may specify in relation to transitioning your duties and responsibilities; (b) assign you other duties; or (c) withdraw any powers vested in, or duties assigned to you. You and the Company shall take all steps necessary (including with regard to any post-termination services by you) to ensure that any termination of your employment described in this Agreement constitutes a “separation from service” within the meaning of Section 409A, and notwithstanding anything contained herein to the contrary, the date on which such separation from service takes place shall be the “date of termination of your employment.”

 

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7.                                            Non-Solicitation.  While employed and for a period of one (1) year following your date of termination for any reason whatsoever, you shall not, without the prior written consent of the Company, directly or indirectly: (a) solicit or induce, or cause others to solicit or induce, any employees of the Company to leave the Company or in any way modify their relationship with the Company; (b) hire or cause others to hire any employees of the Company; (c) encourage or assist in the hiring process of any employees of the Company or in the modification of any such employee’s relationship with the Company, or cause others to participate, encourage or assist in the hiring process of any employees of the Company; or (d) directly or indirectly solicit the trade or patronage of any clients or customers or any prospective clients or customers of the Company with respect to any investment banking or alternative investment products, services, trade secrets or other investment banking or alternative investment product matters in which the Company is active, which includes, but is not limited to, investment banking, hedge fund and private equity investments, sales and trading and/or research. For purposes of paragraphs 7, 8, 9 and 10 of this Agreement, Company shall mean the Company and its controlled affiliates. This provision shall survive the expiration of the Term.

 

8.                                            Non-Competition.  During the Term (including any applicable Notice Period), you may not, anywhere in the United States or elsewhere in the world, directly or indirectly, be employed by, assist or otherwise be affiliated with any Competitor of the Company. For purposes of this Agreement, “Competitor” of the Company shall mean any public or private investment banking or commercial banking firm, as well as any firm engaging in alternative investment strategies, including hedge fund and private equity fund investments, as well as any of such firms’ subsidiaries or controlled affiliates; provided, that ownership for personal investment purposes only of less than 2% of the voting stock of any publicly held corporation shall not constitute a violation hereof.

 

9.                                            Non-Disclosure of Confidential Information.  You shall not at any time, whether during your employment or following the termination of your employment, for any reason whatsoever, directly or indirectly, disclose or furnish to any entity, firm, corporation or person, except as otherwise required by law or in the direct performance of your duties, any confidential or proprietary information of the Company with respect to any aspect of its operations, business or clients. “Confidential or proprietary information” shall mean information generally unknown to the public to which you gain access by reason of your employment by the Company and includes, but is not limited to, information relating to all present or potential customers, business and marketing plans, sales, trading and financial data and strategies, operational costs, and employment benefits and compensation. This provision shall survive the expiration of the Term.

 

10.                                      Company Property.  All records, files, memoranda, reports, customer information, client lists, documents and equipment relating to the business of the Company, which you prepare, possess or come into contact with while you are an employee of the Company, shall remain the sole property of the Company. You agree that upon the termination of your employment, you shall provide to the Company all documents, papers, files or other material in your possession and under your control that are connected with or derived from your services to

 

9



 

the Company. You agree that the Company owns all work product, patents, copyrights and other material produced by you during your employment with the Company. This provision shall survive the expiration of the Term.

 

11.                                           Injunctive Relief.  In the event of a breach by you of your obligations under this Agreement, the Company, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. You acknowledge that the Company shall suffer irreparable harm in the event of a breach or prospective breach of paragraphs 7, 8, 9 and/or 10 hereof and that monetary damages would not be adequate relief.  Accordingly, the Company shall be entitled to seek injunctive relief in any federal or state court of competent jurisdiction located in New York County, or in any state in which you reside. This provision shall survive the expiration of the Term.

 

12.                                           Arbitration.  Any and all disputes arising out of or relating to your employment or the termination of your employment pursuant to this Agreement, including any statutory claims based on alleged discrimination, will be submitted to and resolved exclusively by the American Arbitration Association (“AAA”) pursuant to the AAA’s Employment Arbitration Rules and Mediation Procedures. The arbitration shall be held in the City of New York. The Company and you each hereby irrevocably waive any right to a trial by jury in any action, suit or other legal proceeding arising under or relating to any provision of this Agreement. The arbitration award shall be binding upon both parties, and judgment upon the award may be entered in a court of competent jurisdiction.

 

13.                                           Severability.  Should any provision herein be rendered or declared legally invalid or unenforceable by a court of competent jurisdiction or by the decision of an authorized governmental agency, invalidation of such part shall not invalidate the remaining portions thereof.

 

14.                                           Treatment of Current Equity; Share Lockup.  Notwithstanding anything to the contrary in any of (i) the Previous Employment Agreement, (ii) the Cowen Group, Inc. 2007 Equity and Incentive Plan, (iii) the Cowen Group, Inc. 2006 Equity and Incentive Plan, (iv) the Transaction Agreement, and (v) any other applicable agreement, contract, or arrangement between you and Cowen or any of its subsidiaries, you hereby agree that neither the Transaction nor any related transaction shall result in the accelerated vesting of, or lapsing of restrictions on, any outstanding equity awards held by you as of the Effective Date. You shall be prohibited from selling any portion of the shares of Common Stock held by you as of the Effective Date or received (net of any shares sold or withheld at that time to pay taxes) by you upon the vesting and/or exercise of equity awards granted to you prior to the Effective Date, in either case until the first to occur of (a) the one (1) year anniversary of the Effective Date, (b) your termination of employment by the Company without Cause, due to your death or Disability, or by you for Good Reason, and (c) the occurrence of a Change in Control of the Company occurring after the Effective Date.

 

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15.                                      Complete Agreement.  The provisions herein contain the entire agreement and understanding of the parties regarding compensation and your employment and shall, as of the Effective Date, fully supersede any and all prior agreements, representations, promises or understandings, written or oral, between them pertaining to the subject matter, including, without limitation the Previous Employment Agreement. In the event that either (i) the Transaction is not consummated, (ii) the Transaction Agreement is terminated in accordance with its terms or (iii) your employment with Cowen has terminated prior to the Effective Date, this Agreement shall be null and void ab initio and of no further force and effect. The provisions of this Agreement may not be changed or altered except in writing signed by you and a duly authorized agent of the Company.

 

16.                                      Choice of Law.  The interpretation and application of the terms herein, and your employment relationship at the Company, shall be governed by the laws of the State of New York without regard to principles of conflict of laws.

 

17.                                      No Waiver.  Any failure by either party to exercise its rights to terminate this offer or to enforce any of its provisions shall not prejudice such party’s rights of termination or enforcement for any subsequent or further violations, breaches or defaults by the other party. A waiver of any provision of this Agreement shall not be valid or effective unless memorialized in writing and signed by both parties to this Agreement.

 

18.                                      Assignment.  The rights and obligations of the Company under this Agreement will be transferable, and all of its covenants and agreements will be binding upon and be enforceable by its successors and assigns. You may not assign your rights under this Agreement and the terms and conditions stated herein.

 

19.                                      Tax Compliance.  The Company or any of its applicable affiliates shall withhold from any amounts payable or provided under this Agreement such federal, state or local taxes as shall be required to be withheld under any applicable law or regulation and other required or applicable deductions. If and to the extent any portion of any payment, compensation or other benefit provided to you in connection with your separation from service (as defined in Section 409A) is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and you are a specified employee as defined in Section 409A(a)(2)(B)(i), as determined by the Company or any of its applicable affiliates in accordance with its procedures, by which determination you hereby agree that you are bound, such portion of the payment, compensation or other benefit shall not be paid before the day that is six months plus one day after the date of separation from service (as determined under Section 409A (the “New Payment Date”), except as Section 409A may then permit. The aggregate of any payments that otherwise would have been paid to you during the period between the date of separation from service and the New Payment Date shall be paid to you in a lump sum on such New Payment Date, and any remaining payments will be paid on their original schedule. If you die during the postponement period, the amounts and entitlements delayed on account of Section 409A of the Code shall be paid to the personal representative of your estate on the first to occur of the New Payment Date and thirty (30) days after the date of your death. For purposes of this Agreement, each amount to

 

11



 

be paid or benefit to be provided shall be construed as a separate payment for purposes of Section 409A, and any payments that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. Neither the Company nor any of its applicable affiliates nor you shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A. All reimbursements and in-kind benefits provided under this Agreement that constitute deferred compensation within the meaning of Section 409A shall be made or provided in accordance with the requirements of Section 409A, including, without limitation, that (a) in no event shall reimbursements to you under this Agreement be made later than the end of the calendar year next following the calendar year in which the applicable fees and expenses were incurred, provided, that you shall have submitted an invoice for such fees and expenses at least ten (10) days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred; (b) the amount of in-kind benefits that you are entitled to receive in any given calendar year shall not affect the in-kind benefits that you are entitled to receive in any other calendar year; (c) your right to such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit; and (d) in no event shall your entitlement to such reimbursements or such in-kind benefits apply later than your remaining lifetime (or if longer, through the twentieth (20th) anniversary of the Effective Date). This Agreement is intended to comply with the provisions of Section 409A and shall, to the extent practicable, be construed in accordance therewith. In no event shall a tax gross-up payment be paid later than the end of the year following the year that the related taxes, or taxes on the underlying income or imputed income, are remitted to the applicable taxing authority. Terms defined in this Agreement shall have the meanings given such terms under Section 409A if and to the extent required to comply with Section 409A. In any event, neither the Company nor any of its affiliates makes any representations or warrant and shall have no liability to you or any other person if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Section 409A but not to satisfy the conditions of Section 409A.

 

20.                                 Survivorship.  Upon the expiration or other termination of this Agreement or your employment, the respective rights and obligations of the parties hereto shall survive to the extent necessary to carry out the intentions of the parties under this Agreement.

 

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Please indicate your acceptance of these terms by signing and returning one copy of this Agreement. The second copy is for your records.

 

 

 

Sincerely,

 

 

 

 

 

COWEN GROUP, INC.

 

 

 

 

 

 

 

 

By:

/s/ Christopher A. White

 

 

Name:

Christopher A. White

 

 

Title:

Vice President

ACKNOWLEDGED AND AGREED:

 

 

 

 

 

RAMIUS LLC

 

 

 

 

 

By:  C4S & Co., L.L.C., its managing member

 

 

 

 

 

 

 

 

By:

/s/ Peter A. Cohen

 

 

Name:

Peter A. Cohen

 

 

Title:

Managing Member

 

 

 

 

 

 

 

 

ACKNOWLEDGED AND AGREED:

 

 

 

 

 

LEXINGTONPARK PARENT CORP.

 

 

 

 

 

 

 

 

By:

/s/ Christopher A. White

 

 

Name:

Christopher A. White

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

By:

/s/ Jeffrey M. Solomon

 

 

Name:

Jeffrey M. Solomon

 

 

Title:

President

 

 

 

 

 

 

 

 

AGREED AND ACCEPTED:

 

 

 

 

 

 

 

 

Signed:

/s/ David M. Malcolm

 

 

 

David M. Malcolm

 

 

 

 

 

 

Date:

June 3, 2009

 

 

 

Signature Page to Employment Letter of David M. Malcolm

 




Exhibit 10.9

 

APPENDIX A

 

June 3, 2009

 

David M. Malcolm

At the address last on the records of Cowen

 

Dear Greg:

 

This letter (the “Agreement”) is an appendix to your employment letter agreement (the “Executive Letter Agreement”), dated as of June 3, 2009, with Cowen Group, Inc. (“Cowen”) and LexingtonPark Parent Corp. (the “Company”). Defined terms otherwise used in this Agreement shall have the meaning ascribed to them in the Executive Letter Agreement. This Agreement shall constitute your agreement relating to your post-retirement employment with the Company and the BD Subsidiary, effective as of June 3, 2009, as a Senior Advisor. As set forth more fully below, except as otherwise provided in this Agreement, this Agreement shall supersede any and all prior employment agreements and letters relating to your employment with the Company, including the Executive Letter Agreement.

 

1.             Position.

 

(a)           Commencing upon the date on which your service as a Senior Advisor first commences due to your cessation of full-time employment as contemplated by and in accordance with Section 5(b) of the Executive Letter Agreement (the “Effective Date”), and continuing for thirty-six (36) months from the Effective Date, except as otherwise specified herein (the “Term”), the Company shall employ you as a Senior Advisor.

 

(b)           During your employment as a Senior Advisor you may not be employed by, or otherwise affiliated in any way with, any “Competitor” of the Company, as defined below. You may be affiliated with a business that is not a Competitor; provided, however, that such affiliation does not interfere with your ability to perform your duties and responsibilities set forth in this Agreement.

 

(c)           During your employment you shall be subject to, and must comply with, all Company policies and procedures applicable to the BD Subsidiary’s Managing Directors, as now existing or as may be modified or supplemented by the Company in its sole discretion.

 



 

2.             Duties and Responsibilities.  Your duties and responsibilities as a Senior Advisor shall be defined by mutual agreement between you and the Board of Directors of the Company; provided, however, that your time commitment to the Company and the BD Subsidiary as a Senior Advisor shall not exceed twenty percent (20%) of the average level of bona fide services performed by you on behalf of the Company and the BD Subsidiary during the thirty-six (36) month period immediately preceding the commencement of your service as a Senior Advisor.

 

3.             Use of Facilities.  During your employment as a Senior Advisor to the Company and the BD Subsidiary, the Company shall provide you with reasonable use of, and access to, office space on the Company’s premises if such space is then available. You shall also have reasonable use of the Company’s other services and facilities as necessary to carry out your duties as a Senior Advisor, the costs of which will be borne the Company.

 

4.             Compensation.

 

(a)           Base Salary.  You will be entitled to receive a base salary at the rate of Seven Hundred Fifty Thousand Dollars ($750,000) per annum, less applicable tax and payroll deductions (the “Base Salary”), payable in accordance with the Company’s prevailing payroll practices. Any obligation to pay your Base Salary will commence upon the Effective Date of this Agreement and shall cease upon the termination of your employment as a Senior Advisor. You will not be entitled to any other compensation, including any bonus.

 

(b)           Change in Control.  Provided there is a Change in Control of the Company during the Term of this Agreement (as defined in paragraph 1(a) above) and, provided further, that as of the date of such a Change in Control, you are employed as a Senior Advisor, and have not given notice of your voluntary termination or resignation, you shall be entitled to receive in one lump sum, the unpaid balance of your Base Salary for the remainder of the Term, less applicable tax and payroll deductions (the “Retirement Change in Control Payment”). The Retirement Change in Control Payment shall be payable by the Company to you within ten (10) calendar days of any Change in Control.

 

(c)           Equity Vesting.  Provided that you are not employed by, or otherwise affiliated with, any Competitor (as defined below) of the Company during the Term of this Agreement or thereafter, any Company securities, stock, deferred cash or deferred compensation you received from the Company prior to the Effective Date of this Agreement, shall continue to vest in accordance with, and subject to, the terms and conditions set forth in the applicable award agreements granting you such equity or deferred compensation.

 

5.             Benefits.  During the Term, you, your spouse and your eligible dependents will be eligible to receive health and medical benefits, to the extent such eligibility is permissible under the health and medical benefit plans in place at the Company at that time. All such health and medical benefits shall be provided in accordance with the terms and eligibility requirements of

 

2



 

their respective plans, but in no event on terms that are less favorable than those then existing and applied to similarly situated executives of the Company.

 

6.             Expenses.  All documented and verified, reasonable and necessary expenses which you incur in connection with the performance of your duties hereunder shall be reimbursed in accordance with the Company’s general policies. You must submit proper documentation for each such expense within sixty (60) days after the later of (i) your incurrence of such expense or (ii) your receipt of the invoice for such expense.

 

7.             Termination of Employment.

 

(a)           Death or disability.  Your employment as a Senior Advisor shall terminate on your death. If you become disabled, the Company may terminate your employment by giving you thirty (30) days written notice of its intention to terminate this Agreement. In such event, your employment shall be terminated unless you return to full-time performance of your duties within such thirty (30) day period. “Disabled”, as used herein, shall mean “Disability,” as such term is defined in Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). Disputes on the issues of disability shall be determined by an impartial, reputable physician agreed upon by the parties or their respective doctors. Upon termination under this paragraph 7(a), you or your estate shall be entitled to receive (i) the Equity Benefits and (ii) any benefits or compensation that have been earned, but unpaid, as of the date of termination.

 

(b)           Cause.  Nothing herein shall prevent the Company from terminating your employment for cause. For purposes of this Agreement, “Cause” shall mean the occurrence of an event set forth in clauses (i) through (iv) below as determined by the Board of Directors of the Company in good faith:

 

(i)            your conviction of any crime (whether or not related to your duties at the BD Subsidiary), with the exception of minor traffic offenses;

 

(ii)           fraud, dishonesty, gross negligence or substantial misconduct in the performance of your duties and responsibilities;

 

(iii)          your material violation of or failure to comply with the Company’s internal policies or the rules and regulations of any regulatory or self-regulatory organization with jurisdiction over the BD Subsidiary;

 

(iv)          your failure to perform the material duties of your position.

 

In the case of clauses (ii) through (iv) above, to the extent your alleged breach is reasonably subject to cure, your employment shall not be terminated for Cause unless and until you have been given written notice and shall have failed to correct any such violation, failure or refusal to follow instructions within ten (10) business days of such notice.

 

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Upon termination under this paragraph 7(b), you shall be entitled to receive only that Base Salary earned but unpaid as of the date of termination.

 

(c)           Offset.  In the event of termination, the Company may offset, to the fullest extent permitted by law, any amounts due to the Company from you, or advanced or loaned to you by the Company, from any monies owed to you or your estate by reason of your termination, except to the extent such withholding or offset is not permitted under Section 409A without the imposition of additional taxes or penalties on you.

 

8.             Notice of Resignation or Termination of Employment.  During the Term of this Agreement, you will not voluntarily resign or otherwise terminate your employment as a Senior Advisor without first giving the Company at least ninety (90) days prior written notice of the effective day of your resignation or other termination. Such written notice shall be sent, by certified mail, to the Company, Attn: General Counsel of the Company at the Company’s primary New York address. The Company retains the right to waive the notice requirement in whole or in part. The Company may, but shall not be obligated to, provide you with work at any time after such notice is given pursuant to this paragraph and the Company may, in its discretion, in respect of all or part of an unexpired period of notice: (i) require you to comply with such conditions as it may specify in relation to transitioning your duties and responsibilities, (ii) assign you other duties or (iii) withdraw any powers vested in, or duties assigned to, you. Upon termination under this paragraph 8, you shall be entitled to receive only that Base Salary earned but unpaid as of the date of termination.

 

9.             Non-Solicitation.

 

(a)           While employed by the Company as a Senior Advisor and for a period of two (2) years following the expiration of the Term of your employment or the effective date of your termination, you will not, without the Company’s prior written consent, directly or indirectly, (a) solicit or induce, or cause others to solicit or induce, any employees of the Company to leave the Company, or in any way modify their relationship with the Company, (b) hire or cause others to hire any employees of the Company, (c) encourage or assist in the hiring process of any employees of the Company or in the modification of any such employee’s relationship with the Company, or cause others to participate, encourage or assist in the hiring process of any employees of the Company.

 

(b)           In addition, while employed by the Company as a Senior Advisor and for a period of two (2) years following the expiration of the Term of your employment or the effective date of your termination, you agree you will not, directly or indirectly, solicit the trade or patronage of any clients or customers or any prospective clients or customers of the Company with respect to any investment banking or alternative investment products, services, trade secrets or other investment banking or alternative investment product matters in which the Company is active, which includes, but is not limited to, investment banking, hedge fund and private equity investments, sales and trading and/or research. This paragraph 9 shall survive expiration of the

 

4



 

Term and shall continue in full force and effect during your employment with the Company and thereafter as applicable.

 

10.           Non-Competition.  During your employment as a Senior Advisor and for a period of one (1) year following the expiration of the Term of your employment or the effective date of your termination, you may not, anywhere in the United States or elsewhere in the world, directly or indirectly, be employed by, assist or otherwise be affiliated with any Competitor of the Company. For purposes of this Agreement, “Competitor” of the Company shall mean any public or private investment banking or commercial banking firm, as well as any firm engaging in alternative investment strategies, including hedge fund and private equity fund investments, as well as any of such firms’ subsidiaries or controlled affiliates. This paragraph 10 shall survive expiration of the Term and shall continue in full force and effect during your employment with the Company and thereafter as applicable.

 

11.           Non-Disclosure of Confidential Information.  You will not at any time, whether during your employment or following the termination or expiration of your employment, for any reason whatsoever, and forever hereafter, directly or indirectly disclose or furnish to any firm, corporation or person, except as otherwise required by law, any confidential or proprietary information of the Company with respect to any respect of its operations or affairs. “Confidential or proprietary information” shall mean information generally unknown to the public to which you gain access by reason of your employment by the Company and includes, but is not limited to, information relating to all present or potential customers, business and marketing plans, sales, trading and financial data and strategies, salaries and employment benefits, and operational costs. This paragraph 11 shall survive expiration of the Term and shall continue in full force and effect during your employment with the Company and thereafter as applicable.

 

12.           Return of Company Property and Company Work Product.  All records, files, memoranda, reports, customer information, client lists, documents, equipment, and the like, relating to the business of the Company which you prepared or came into contact with while you were an employee of the Company, shall remain the sole property of the Company. You agree that on request by the Company, and in any event upon the termination of your employment, you shall turn over to the Company all documents, papers, or other material in your possession and under your control which may contain or be derived from confidential information, together with all documents, notes, or other work product which is connected with or derived from your services to the Company whether or not such material is in your possession. You agree you shall have no proprietary interest in any work product developed or used by you and arising out of employment by the Company. This paragraph 12 shall survive expiration of the Term and shall continue in full force and effect during your employment with the Company and thereafter as applicable.

 

13.           Remedies and Rights to Injunctive Relief.  In the event of a breach by you of your obligation under this Agreement, the Company, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its

 

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rights under this Agreement. You acknowledge that the Company shall suffer irreparable harm in the event of a breach or prospective breach of paragraphs 9, 10, 11 and/or 12 hereof and monetary damages would not be adequate compensation. Accordingly, the Company shall be entitled to seek injunctive relief in any federal or state court of competent jurisdiction located in New York County. You waive the defense that a remedy at law would be adequate. This paragraph 13 shall survive expiration of the Term and shall continue in full force and effect during your employment with the Company and thereafter as applicable.

 

14.           Arbitration; Legal Fees.

 

(a)           Any and all disputes arising out of or relating to your employment or the termination of your employment with the Company, including any statutory claims based on alleged discrimination, will be submitted to and resolved exclusively by the American Arbitration Association (“AAA”) pursuant to the AAA’s Employment Arbitration Rules and Mediation Procedures. The arbitration shall be held in the City of New York. In agreeing to arbitrate your claims, you recognize that you are waiving your right to a trial in court and by a jury. The arbitration award shall be binding upon both parties, and judgment upon the award may be entered in a court of competent jurisdiction. The cost of such proceedings, including all filing and session fees, and all attorneys’ fees, shall be assessed in accordance with the AAA Rules or as otherwise determined by the arbitrator.

 

(b)           The arbitrators shall not have authority to amend, alter, modify, add to or subtract from the provisions hereof. The award of the arbitrators, in addition to granting the relief prescribed above and such other relief as the arbitrators may deem proper, may contain provisions commanding or restraining acts or conduct of the parties or their representatives and may further provide for the arbitrators to retain jurisdiction over this Agreement and the enforcement thereof. If either party shall deliberately default in appearing before the arbitrators, the arbitrators are empowered, nonetheless, to take the proof of the party appearing and render an award thereon.

 

(c)           This paragraph 14 shall survive expiration of the Term and shall continue in full force and effect during your employment with the Company and thereafter as applicable.

 

15.           Severability.  Should any provision herein be rendered or declared legally invalid or unenforceable by a court of competent jurisdiction or by the decision of an authorized governmental agency, such invalidation of such part shall not invalidate the remaining portions thereof.

 

16.           Other Agreements.  You represent and warrant that you are not a party to any agreement or bound by an obligation which would prohibit you from accepting and agreeing hereto or fully performing the obligations hereunder.

 

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17.           Complete Agreement.  The provisions herein contain the entire agreement and understanding of the parties and fully supersede any and all prior agreements or understandings between them pertaining to the subject matter hereof, except for those provisions of the Executive Letter Agreement that must survive in order to carry out the intentions of the parties (such as the continuing rights under paragraphs 4 and 6 of the Executive Letter Agreement and your rights in respect of your CHRP Interest). There have been no representations, inducements, promises or agreements of any kind which have been made by either party, or by any person acting on behalf of either party, which are not embodied herein. The provisions hereof may not be changed or altered except in writing duly executed by you and a duly authorized agent of the Company.

 

18.           Applicable Law.  The interpretation and application of the terms herein shall be governed by the laws of the State of New York without regard to principles of conflict of laws.

 

19.           No Waiver.  Any failure by either party to exercise its rights to terminate this Agreement or to enforce any of its provisions shall not prejudice such party’s rights of termination or enforcement for any subsequent or further violations or defaults by the other party.

 

20.           Counterparts.  This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

21.           Section 409A.  The Company or any of its applicable affiliates shall withhold from any amounts payable or provided under this Agreement such federal, state or local taxes as shall be required to be withheld under any applicable law or regulation and other required or applicable deductions. Except with respect to any payments or benefits which you may be entitled to under paragraph 4 of the Executive Letter Agreement, which shall be governed by the provisions contained therein, if and to the extent any portion of any payment, compensation or other benefit provided to you in connection with your separation from service (as defined in Section 409A) is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and you are a specified employee as defined in Section 409A(a)(2)(B)(i), as determined by the Company or any of its applicable affiliates in accordance with its procedures, by which determination you hereby agree that you are bound, such portion of the payment, compensation or other benefit shall not be paid before the day that is six months plus one day after the date of separation from service (as determined under Section 409A (the “New Payment Date”), except as Section 409A may then permit. The aggregate of any payments that otherwise would have been paid to you during the period between the date of separation from service and the New Payment Date shall be paid to you in a lump sum on such New Payment Date, and any remaining payments will be paid on their original schedule. If you die during the postponement period, the amounts and entitlements delayed on account of Section 409A of the Code shall be paid to the personal representative of your estate on the first to occur of the New Payment Date and thirty (30) days after the date of your death. For purposes of this

 

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Agreement, each amount to be paid or benefit to be provided shall be construed as a separate payment for purposes of Section 409A, and any payments that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. Neither the Company nor any of its applicable affiliates nor you shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A. All reimbursements and in-kind benefits provided under this Agreement that constitute deferred compensation within the meaning of Section 409A shall be made or provided in accordance with the requirements of Section 409A, including, without limitation, that (a) in no event shall reimbursements to you under this Agreement be made later than the end of the calendar year next following the calendar year in which the applicable fees and expenses were incurred, provided, that you shall have submitted an invoice for such fees and expenses at least ten (10) days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred; (b) the amount of in-kind benefits that you are entitled to receive in any given calendar year shall not affect the in-kind benefits that you are entitled to receive in any other calendar year; (c) your right to such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit; and (d) in no event shall your entitlement to such reimbursements or such in-kind benefits apply later than your remaining lifetime (or if longer, through the twentieth (20th) anniversary of the Effective Date). This Agreement is intended to comply with the provisions of Section 409A and shall, to the extent practicable, be construed in accordance therewith. Terms defined in the Agreement shall have the meanings given such terms under Section 409A if and to the extent required to comply with Section 409A. In any event, neither the Company nor any of its affiliates makes any representations or warrant and shall have no liability to you or any other person if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Section 409A but not to satisfy the conditions of Section 409A.

 

22.           Assignment.  The rights and obligations of the Company under this Agreement will be transferable, and all of its covenants and agreements will be binding upon and be enforceable by its successors and assigns. You may not assign this offer of employment and the terms and conditions stated herein.

 

23.           Survivorship.  Upon the expiration or other termination of this Agreement or your employment, the respective rights and obligations of the parties hereto shall survive to the extent necessary to carry out the intentions of the parties under this Agreement.

 

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If you agree to the terms set forth in this Agreement please acknowledge your agreement by signing the signature line set forth below.

 

 

Sincerely,

 

 

 

LEXINGTONPARK PARENT CORP.

 

 

 

 

 

By:

/s/ Christopher A. White

 

Name:

Christopher A. White

 

Title:

Vice President

 

 

 

 

 

By:

/s/ Jeffrey Solomon

 

Name:

Jeffrey Solomon

 

Title:

President

 

 

 

 

AGREED AND ACCEPTED:

 

 

 

 

 

Signed:

/s/ David M. Malcolm

 

 

 

David M. Malcolm

 

 

 

 

 

 

 

Date:

June 3, 2009

 

 

 

 

Signature Page to Appendix A of Employment Letter of David Malcolm

 




Exhibit 10.10

 

EXECUTION COPY

 

July 10, 2009

 

Christopher A. White

At the address last on the records of Cowen

 

Dear Chris:

 

As you know, Cowen Group, Inc. (“Cowen”) has entered into a Transaction Agreement and Agreement and Plan of Merger (the “Transaction Agreement”) with LexingtonPark Parent Corp. (the “Company”), Lexington Merger Corp., Park Exchange LLC (the “Exchange Sub”), and Ramius LLC (“Ramius”), pursuant to which, among other things, Cowen will become a wholly owned subsidiary of the Company and Exchange Sub will acquire substantially all of the assets and assume all of the liabilities of Ramius (collectively, the “Transaction”).  The Company and Cowen desire to have your continued dedication and service pending and following the Transaction.  Accordingly, we are pleased to offer you continued employment with the Company and its subsidiaries, and we look forward to continuing our mutually rewarding and beneficial relationship.  Cowen, the Company and you previously entered into a letter agreement on June 3, 2009, which outlined the terms of your continued employment (the “Prior Agreement”).  Given that the terms of your continued employment have changed since the parties entered into the Prior Agreement, the parties wish to enter into this letter agreement (the “Agreement”), which will outline such updated terms of your continued employment and will supersede the Prior Agreement.  This Agreement will become effective upon the Effective Time (as defined in the Transaction Agreement) (the “Effective Date”) and, as more fully set forth below, shall, as of the Effective Date, supersede any and all prior employment agreements and letters concerning your employment with Cowen and its subsidiaries, including, without limitation, the Prior Agreement.

 

1.             Term.  This Agreement provides the details of the terms of your employment from and following the Effective Date until termination of your employment (the “Term”), and certain other terms and conditions of your employment with the Company and its subsidiaries that continue beyond the Term unless otherwise specified.

 

2.             Position.  You shall be employed as a Managing Director and the Chief Financial Officer of the Company and shall report directly to the Chief Executive Officer of the Company, and you shall also be appointed, on the Effective Date, to serve as a member of the Company’s Operating Committee.  You shall have the duties, responsibilities and authority commensurate with your title and position and such other duties and responsibilities as may be reasonably assigned to you by the Chief Executive Officer of the Company.  You shall continue to be subject to, and must comply with, all policies and procedures applicable to employees of the Company’s Broker-Dealer subsidiary (the “BD Subsidiary”), as now existing or as may be modified or supplemented from time to time by the BD Subsidiary.

 



 

3.             Compensation and Benefits.

 

a.             Base Salary.  You will be paid a base salary at the rate of not less than Four Hundred Thousand Dollars ($400,000) per annum (“Base Salary”), payable in accordance with the Company’s prevailing payroll practices but no less frequently than monthly.  The term Base Salary as utilized in this Agreement shall refer to Base Salary as in effect from time to time, including any increases.  Except as otherwise provided in this Agreement, any obligation to pay your Base Salary will cease upon the termination of your employment.

 

b.             Annual Bonus.  For each calendar year during which you are employed by the Company, you shall be entitled to earn an annual performance-based bonus pursuant to a Company bonus plan as determined by the Chief Executive Officer of the BD Subsidiary in consultation with the Chief Executive Officer of the Company (the “Internal Committee”), and, if necessary, approved by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”). The total annual bonus that may be earned by you for any calendar year is referred to herein as the “Annual Bonus.”  Your Annual Bonus shall be determined consistently with and on the same basis as, and shall have terms and conditions no less favorable than those that apply to, other similarly situated executives of the Company.  Your Annual Bonuses may, at the discretion of the Internal Committee and/or the Compensation Committee, and consistent with similarly situated executives of the Company, include a certain percentage of restricted securities, other stock or security-based awards or deferred cash or other deferred compensation.

 

c.             Benefits.  During the Term, you will be entitled to employee benefits, fringe benefits and perquisites consistent with, and on the same basis as, similarly situated executives of the Company, subject to the terms of the Transaction Agreement, including, without limitation, the provisions contained in Section 7.6 thereof.

 

d.             Expense Reimbursement.  During the Term, the Company shall reimburse you for all reasonable expenses incurred by you in the performance of your duties in accordance with the Company’s policies applicable to similarly situated executives of the Company.  All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

e.             Vacation.  During the Term, you shall be eligible for paid-time off in accordance with the BD Subsidiary’s vacation policy.

 

4.             Restricted Stock Award.

 

a.             Award.  The Company will grant you, effective as of the Effective Date, 115,533 restricted shares of Company common stock (“Common Stock”) (the “Restricted Stock Award”) on the terms and conditions set forth in this paragraph 4; provided, however, if as of the Effective Date, the Company’s shareholders have not approved an amendment or a successor plan to the Cowen Group, Inc. 2007 Equity and Incentive Plan and the Cowen Group, Inc. 2006

 

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Equity and Incentive Plan (together, the “Cowen Plan”) and there are not sufficient shares under the Cowen Plan to grant you the entire amount of shares of Common Stock subject to the Restricted Stock Award, you will be granted a “Pro-Rata Restricted Stock Award” on the Effective Date.  For purposes of this Agreement, a “Pro-Rata Restricted Stock Award” means that number of restricted shares of Common Stock equal to the product of (i) (x) the total number of shares of Common Stock subject to your Restricted Stock Award, divided by (y) the total number of shares of Common Stock subject to similar restricted stock awards or restricted stock unit awards to be granted on the Effective Date and (ii) the total number of shares of Common Stock available for grant under the Cowen Plan on the Effective Date.

 

b.             Failure to Grant the Entire Restricted Stock Award on the Effective Date.  In the event that the Company has not granted you the entire Restricted Stock Award on the Effective Date, the Company shall, by July 1, 2010, grant you any theretofore ungranted portion of the Restricted Stock Award; provided, however, if there are not sufficient shares available to grant you such ungranted portion of the Restricted Stock Award by July 1, 2010, the Company shall instead, in no event later than July 1, 2010, grant you the right to receive an amount in cash equal to One Million Dollars ($1,000,000), less the Effective Date value of the Pro-Rata Restricted Stock Award and any other portion of the Restricted Stock Award, if any, previously granted to you (such cash award, the “Cash Makeup Award”).

 

c.             Vesting.  The Restricted Stock Award (or the Cash Makeup Award, as applicable) shall vest and become free of restrictions in two equal installments on each of the second and third anniversaries of the Effective Date, provided that you are employed by the Company or a subsidiary thereof and have not yet given notice to terminate your employment without Good Reason (as set forth in paragraph 6 below) as of such date.  Notwithstanding the foregoing, any theretofore unvested portion of the Restricted Stock Award (or the Cash Makeup Award, as applicable) shall immediately vest in full and become free of restriction (and, in the case of the Cash Makeup Award, be paid in cash within thirty (30) days of the date of termination), in the event that, (i) your employment is terminated (x) by the Company other than for Cause (as defined below), (y) due to your death or Disability (as defined below) or (z) by you for Good Reason (as defined below) or (ii) a Change in Control of the Company (as defined in the Cowen Group, Inc. 2007 Equity and Incentive Plan, as may be revised to reflect the structure of the Company following the Transaction) occurs after the Effective Date (each of the events in clauses (i) and (ii), an “Accelerated Vesting Event”).  In the event that an Accelerated Vesting Event occurs prior to the Company having granted you any portion of the Restricted Stock Award or the Cash Makeup Award, as applicable, you shall vest in full in, and be paid in cash within thirty (30) days of the date of termination (or, in the event of a Change in Control, on the date of such Change in Control), an amount in cash equal to the theretofore ungranted portion of the Restricted Stock Award.

 

d.             Registration.  As of the Effective Date, the Company shall, at its expense, reserve for issuance a number of shares of Common Stock at least equal to the number of shares of Common Stock that will be subject to the Restricted Stock Award and shall, as soon as reasonably possible after the Effective Date, file a registration statement on Form S-8 (or any successor form, or if Form S-8 is not available, other appropriate forms) with respect to the

 

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shares of Common Stock subject to the Restricted Stock Award.  The Company shall thereafter maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as you hold the Restricted Stock Award (or any portion thereof) or any of the shares of Common Stock that were previously subject to the Restricted Stock Award, or until such earlier date as such Restricted Stock Award and shares of Common Stock, as applicable, may otherwise be freely sold under applicable law.

 

e.             Other Terms of Restricted Stock Award; Form of Agreement.  The terms of your Restricted Stock Award will be evidenced in an award agreement by and between you and the Company, which will be substantially in the same form as (and shall in no event contain terms less favorable to you than those contained in) the “Form of 2007 Equity Award Agreement for Executive Officers” filed as Exhibit 10.25 to the Cowen Group, Inc. Form 10-K for the year ended December 31, 2008, provided that such award agreement will be modified to incorporate the terms of this Agreement (including, without limitation, the defined terms contained herein and the restrictive covenants set forth herein) which shall, in any event, control.

 

5.             Termination of Employment.

 

a.             By the Company Other than for Death, Disability or for Cause; By You for Good Reason.  If your employment is terminated (i) by the Company for any reason other than due to (x) your death or Disability (as defined below) or (y) for Cause (as defined below) or (ii) by you upon resignation for Good Reason (as defined below), you shall be entitled to receive (A) that portion of your Base Salary earned, but unpaid as of the date of termination, paid within thirty (30) days of the date of your termination, (B) any Annual Bonus earned by you for a prior completed calendar year to the extent not theretofore paid and not theretofore deferred (with any such deferred amounts to be paid in accordance with and at the times set forth in the applicable deferral arrangement) paid at the same time as all other Company annual bonuses are paid for the year in which your employment terminates, but in no event later than March 15 of the calendar year following the year in which your employment terminates (the amounts described in clauses (A) and (B), and the times at which such amounts are paid, shall be hereinafter referred to as the “Accrued Obligations”), and (C) in addition to any rights you have with respect to the Restricted Stock Award under paragraph 4 of this Agreement, (1) any outstanding equity awards shall become fully vested and exercisable and any restrictions thereon shall lapse effective as of your date of termination (provided that any delays in payment or settlement set forth in such grant or award agreements that are required under Section 409A shall remain effective) and (2) any stock options outstanding as of your date of termination shall remain exercisable for the remainder of the respective terms of such stock options (taking into account any provisions of the equity incentive plan or option agreements that cause them to expire or be replaced in connection with changes in control or similar events) (clauses (1) and (2) collectively referred to herein as the “Equity Benefits”).

 

b.             Death or Disability.  Your employment shall terminate on your death.  If you become “Disabled,” the Company may terminate your employment by giving you thirty (30) days’ written notice of its intention to do so unless you return to full-time performance of your

 

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duties within such thirty (30)-day period.  “Disabled” and “Disability,” as used herein, shall mean your inability to perform the essential duties and responsibilities of your job with or without reasonable accommodation, for a continuous period of ninety (90) days or more, or for one hundred twenty (120) days or more in a twelve (12)-month period, due to a physical or mental condition.  Disputes on the issues of Disability shall be determined by an impartial, reputable physician agreed upon by the parties or their respective doctors.  Upon termination under this paragraph 5b, in addition to any rights you have under paragraph 4 of this Agreement, you or your estate shall be entitled to receive (i) the Accrued Obligations and (ii) the Equity Benefits.

 

c.             Termination for Cause.  The Company may terminate your employment with or without Cause.  Upon termination of employment for Cause, you shall be entitled to receive only that portion of your Base Salary earned, but unpaid, as of the date of termination, payable no later than thirty (30) days after your date of termination.  For purposes of this Agreement, “Cause” shall mean the occurrence of an event set forth in clauses (i) through (iv) below as determined by the Company in good faith:

 

i.              your conviction of any crime (whether or not related to your duties at the BD Subsidiary), with the exception of minor traffic offenses;

 

ii.             fraud, dishonesty, gross negligence or substantial misconduct in the performance of your duties and responsibilities of your employment;

 

iii.            your material violation of or failure to comply with the Company’s internal policies or the rules and regulations of any regulatory or self-regulatory organization with jurisdiction over the BD Subsidiary;

 

iv.            your failure to perform the material duties of your position.

 

In the case of clauses (ii) through (iv) above, to the extent your alleged breach is reasonably subject to cure, your employment shall not be terminated for Cause unless and until you have been given written notice and shall have failed to correct any such violation, failure or refusal to follow instructions within ten (10) business days of such notice.

 

d.             Termination By You without Good Reason.  You may terminate your employment with or without “Good Reason”.  Upon termination of your employment by you without Good Reason, you shall be entitled to receive only that portion of your Base Salary earned, but unpaid, as of the effective date of termination, payable no later than thirty (30) days after the effective date of termination .  For purposes of this Agreement, “Good Reason” shall mean:

 

i.              any requirement that your services during the Term be rendered primarily at a location or locations other than the Company’s or the BD Subsidiary’s offices in the New York City metropolitan area;

 

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ii.             a material diminution by the Company or the BD Subsidiary of your roles and responsibilities, it being agreed and understood that your roles and responsibilities may change on terms that are mutually acceptable to you, the Company, and the BD Subsidiary, and such change will be deemed not to be a material diminution within the meaning of this clause; or

 

iii.            any material breach of this Agreement by the Company.

 

In order to invoke a termination for Good Reason, you must provide written notice to the Company of the existence of the conditions giving rise to such “Good Reason” within ninety (90) days following your knowledge of the initial existence of such condition or conditions, and the Company shall have thirty (30) days following receipt of such written notice (the “Cure Period”) during which it may remedy the condition.  In the event that the Company fails to remedy the condition constituting Good Reason during the Cure Period, you must deliver notice to the Company of your intention to terminate employment, if at all, within ninety (90) days following the Cure Period in order for such termination to constitute a termination for Good Reason.

 

e.             Further Effect of Termination on Board and Officer Positions.  If your employment ends for any reason, you agree that you will cease immediately to hold any and all officer or director positions you then have with the Company or any subsidiary, absent a contrary direction from the Board of Directors of the Company (which may include either a request to continue such service or a direction to cease serving upon notice without regard to whether your employment has ended).  You hereby irrevocably appoint the Company to be your attorney-in-fact to execute any documents and do anything in your name to effect your ceasing to serve as a director and officer of the Company and any subsidiary, should you fail to resign following a request from the Company to do so.  A written notification signed by a director or duly authorized officer of the Company that any instrument, document or act falls within the authority conferred by this clause will be conclusive evidence that it does so.

 

f.              No Mitigation; Offset.  In no event shall you be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to you under any of the provisions of this Agreement and such amounts shall not be reduced whether or not you obtain other employment.  In the event of your termination of employment, the Company may offset, to the fullest extent permitted by law, any amounts due to the Company from you, or advanced or loaned to you by the Company, from any monies owed to you or your estate by reason of your termination, except to the extent such withholding or offset is not permitted under Section 409A without the imposition of additional taxes or penalties on you.

 

6.             Notice of Termination.  You shall not voluntarily terminate your employment relationship with the Company or any of its affiliates without Good Reason (including, due to retirement) without first giving the Company at least one hundred eighty (180) days’ prior written notice of the effective date of your retirement, resignation or other termination (the “Notice Period”).  Such written notice shall be sent by certified mail to the General Counsel of the Company at the Company’s primary New York address.  The Company retains the right to waive the notice requirement in whole or in part or to place you on paid leave for all or part of

 

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the Notice Period.  In the alternative, at any time after you give notice, the Company may, but shall not be obligated to, provide you with work and (a) require you to comply with such conditions as it may specify in relation to transitioning your duties and responsibilities; (b) assign you other duties; or (c) withdraw any powers vested in, or duties assigned to you.  You and the Company shall take all steps necessary (including with regard to any post-termination services by you) to ensure that any termination of your employment described in this Agreement constitutes a “separation from service” within the meaning of Section 409A, and notwithstanding anything contained herein to the contrary, the date on which such separation from service takes place shall be the “date of termination of your employment.”

 

7.             Non-Solicitation.  While employed and for a period of one (1) year following your date of termination for any reason whatsoever, you shall not, without the prior written consent of the Company, directly or indirectly:  (a) solicit or induce, or cause others to solicit or induce, any employees of the Company to leave the Company or in any way modify their relationship with the Company; (b) hire or cause others to hire any employees of the Company; (c) encourage or assist in the hiring process of any employees of the Company or in the modification of any such employee’s relationship with the Company, or cause others to participate, encourage or assist in the hiring process of any employees of the Company; or (d) directly or indirectly solicit the trade or patronage of any clients or customers or any prospective clients or customers of the Company with respect to any investment banking or alternative investment products, services, trade secrets or other investment banking or alternative investment product matters in which the Company is active, which includes, but is not limited to, investment banking, hedge fund and private equity investments, sales and trading and/or research.  For purposes of paragraphs 7, 8, 9 and 10 of this Agreement, Company shall mean the Company and its controlled affiliates. This provision shall survive the expiration of the Term.

 

8.             Non-Competition.  During the Term (including any applicable Notice Period), you may not, anywhere in the United States or elsewhere in the world, directly or indirectly, be employed by, assist or otherwise be affiliated with any Competitor of the Company.  For purposes of this Agreement, “Competitor” of the Company shall mean any public or private investment banking or commercial banking firm, as well as any firm engaging in alternative investment strategies, including hedge fund and private equity fund investments, as well as any of such firms’ subsidiaries or controlled affiliates; provided, that ownership for personal investment purposes only of less than 2% of the voting stock of any publicly held corporation shall not constitute a violation hereof.

 

9.             Non-Disclosure of Confidential Information.  You shall not at any time, whether during your employment or following the termination of your employment, for any reason whatsoever, directly or indirectly, disclose or furnish to any entity, firm, corporation or person, except as otherwise required by law or in the direct performance of your duties, any confidential or proprietary information of the Company with respect to any aspect of its operations, business or clients.  “Confidential or proprietary information” shall mean information generally unknown to the public to which you gain access by reason of your employment by the Company and includes, but is not limited to, information relating to all present or potential customers, business

 

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and marketing plans, sales, trading and financial data and strategies, operational costs, and employment benefits and compensation.  This provision shall survive the expiration of the Term.

 

10.           Company Property.  All records, files, memoranda, reports, customer information, client lists, documents and equipment relating to the business of the Company, which you prepare, possess or come into contact with while you are an employee of the Company, shall remain the sole property of the Company. You agree that upon the termination of your employment, you shall provide to the Company all documents, papers, files or other material in your possession and under your control that are connected with or derived from your services to the Company.  You agree that the Company owns all work product, patents, copyrights and other material produced by you during your employment with the Company.  This provision shall survive the expiration of the Term.

 

11.           Injunctive Relief.  In the event of a breach by you of your obligations under this Agreement, the Company, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement.  You acknowledge that the Company shall suffer irreparable harm in the event of a breach or prospective breach of paragraphs 7, 8, 9 and/or 10 hereof and that monetary damages would not be adequate relief.  Accordingly, the Company shall be entitled to seek injunctive relief in any federal or state court of competent jurisdiction located in New York County, or in any state in which you reside.  This provision shall survive the expiration of the Term.

 

12.           Arbitration.  Any and all disputes arising out of or relating to your employment or the termination of your employment pursuant to this Agreement, including any statutory claims based on alleged discrimination, will be submitted to and resolved exclusively by the American Arbitration Association (“AAA”) pursuant to the AAA’s Employment Arbitration Rules and Mediation Procedures.  The arbitration shall be held in the City of New York.  The Company and you each hereby irrevocably waive any right to a trial by jury in any action, suit or other legal proceeding arising under or relating to any provision of this Agreement.   The arbitration award shall be binding upon both parties, and judgment upon the award may be entered in a court of competent jurisdiction.

 

13.           Severability.  Should any provision herein be rendered or declared legally invalid or unenforceable by a court of competent jurisdiction or by the decision of an authorized governmental agency, invalidation of such part shall not invalidate the remaining portions thereof.

 

14.           Treatment of Current Equity; Share Lockup.  Notwithstanding anything to the contrary in any of (i) the Cowen Group, Inc. 2007 Equity and Incentive Plan, (ii) the Cowen Group, Inc. 2006 Equity and Incentive Plan, (iii) the Transaction Agreement, and (iv) any other applicable agreement, contract, or arrangement between you and Cowen or any of its subsidiaries, you hereby agree that neither the Transaction nor any related transaction shall result in the accelerated vesting of, or lapsing of restrictions on, any outstanding equity awards held by you as of the Effective Date.  You shall be prohibited from selling any portion of the shares of Common Stock held by you as of the Effective Date or received (net of any shares sold or

 

8



 

withheld at that time to pay taxes) by you upon the vesting and/or exercise of equity awards granted to you prior to the Effective Date, in either case until the first to occur of (a) the one (1) year anniversary of the Effective Date, (b) your termination of employment by the Company without Cause, due to your death or Disability, or by you for Good Reason, and (c) the occurrence of a Change in Control of the Company occurring after the Effective Date.

 

15.           Complete Agreement.  The provisions herein contain the entire agreement and understanding of the parties regarding compensation and your employment and shall, as of the Effective Date, fully supersede any and all prior agreements, representations, promises or understandings, written or oral, between them pertaining to the subject matter, including, without limitation, the Prior Agreement.  In the event that either (i) the Transaction is not consummated, (ii) the Transaction Agreement is terminated in accordance with its terms or (iii) your employment with Cowen has terminated prior to the Effective Date, this Agreement shall be null and void ab initio and of no further force and effect.  The provisions of this Agreement may not be changed or altered except in writing signed by you and a duly authorized agent of the Company.

 

16.           Choice of Law.  The interpretation and application of the terms herein, and your employment relationship at the Company, shall be governed by the laws of the State of New York without regard to principles of conflict of laws.

 

17.           No Waiver.  Any failure by either party to exercise its rights to terminate this offer or to enforce any of its provisions shall not prejudice such party’s rights of termination or enforcement for any subsequent or further violations, breaches or defaults by the other party.  A waiver of any provision of this Agreement shall not be valid or effective unless memorialized in writing and signed by both parties to this Agreement.

 

18.           Assignment.  The rights and obligations of the Company under this Agreement will be transferable, and all of its covenants and agreements will be binding upon and be enforceable by its successors and assigns.  You may not assign your rights under this Agreement and the terms and conditions stated herein.

 

19.           Tax Compliance.  The Company or any of its applicable affiliates shall withhold from any amounts payable or provided under this Agreement such federal, state or local taxes as shall be required to be withheld under any applicable law or regulation and other required or applicable deductions.  If and to the extent any portion of any payment, compensation or other benefit provided to you in connection with your separation from service (as defined in Section 409A) is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and you are a specified employee as defined in Section 409A(a)(2)(B)(i), as determined by the Company or any of its applicable affiliates in accordance with its procedures, by which determination you hereby agree that you are bound, such portion of the payment, compensation or other benefit shall not be paid before the day that is six months plus one day after the date of separation from service (as determined under Section 409A (the “New Payment Date”), except as Section 409A may then permit.  The aggregate of any payments that otherwise would have been paid to you during the period between the date of separation from service and the New Payment Date shall be paid to you in a lump sum on such New Payment Date, and any

 

9



 

remaining payments will be paid on their original schedule.  If you die during the postponement period, the amounts and entitlements delayed on account of Section 409A of the Code shall be paid to the personal representative of your estate on the first to occur of the New Payment Date and thirty (30) days after the date of your death.  For purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate payment for purposes of Section 409A, and any payments that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.  Neither the Company nor any of its applicable affiliates nor you shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.  All reimbursements and in-kind benefits provided under this Agreement that constitute deferred compensation within the meaning of Section 409A shall be made or provided in accordance with the requirements of Section 409A, including, without limitation, that (a) in no event shall reimbursements to you under this Agreement be made later than the end of the calendar year next following the calendar year in which the applicable fees and expenses were incurred, provided, that you shall have submitted an invoice for such fees and expenses at least ten (10) days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred; (b) the amount of in-kind benefits that you are entitled to receive in any given calendar year shall not affect the in-kind benefits that you are entitled to receive in any other calendar year; (c) your right to such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit; and (d) in no event shall your entitlement to such reimbursements or such in-kind benefits apply later than your remaining lifetime (or if longer, through the twentieth (20th) anniversary of the Effective Date).   This Agreement is intended to comply with the provisions of Section 409A and shall, to the extent practicable, be construed in accordance therewith.  In no event shall a tax gross-up payment be paid later than the end of the year following the year that the related taxes, or taxes on the underlying income or imputed income, are remitted to the applicable taxing authority.  Terms defined in this Agreement shall have the meanings given such terms under Section 409A if and to the extent required to comply with Section 409A.  In any event, neither the Company nor any of its affiliates makes any representations or warrant and shall have no liability to you or any other person if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Section 409A but not to satisfy the conditions of Section 409A.

 

20.           Survivorship.  Upon the expiration or other termination of this Agreement or your employment, the respective rights and obligations of the parties hereto shall survive to the extent necessary to carry out the intentions of the parties under this Agreement.

 

10



 

Please indicate your acceptance of these terms by signing and returning one copy of this Agreement.  The second copy is for your records.

 

 

 

Sincerely,

 

 

 

COWEN GROUP, INC.

 

 

 

 

 

By:

/s/ J. Kevin McCarthy

 

Name: 

J. Kevin McCarthy

 

Title:

General Counsel

ACKNOWLEDGED AND AGREED:

 

 

 

 

 

LexingtonPark Parent Corp.

 

 

 

 

 

By:

/s/ Marran Ogilvie

 

Name:

Marran Ogilvie

 

Title:

Secretary

 

 

 

 

 

AGREED AND ACCEPTED:

 

 

 

 

 

Signed:

/s/ Christopher A. White

 

 

Christopher A. White

 

 

 

Date:

July 10, 2009

 

 

[Signature Page to White Employment Letter]

 

2



 

 

 

December 8, 2009

 

Christopher A. White

247 West 87th Street, Apt. 18F

New York, New York  10024

 

Dear Chris:

 

Pursuant to paragraph 15 of your employment agreement dated as of July 10, 2009 (the “Agreement”), this letter amends the Agreement effective as of November 23, 2009 by deleting the first sentence of paragraph 2 of the Agreement which reads: “You shall be employed as a Managing Director and the Chief Financial Officer of the Company and shall report directly to the Chief Executive Officer of the Company, and you shall also be appointed, on the Effective Date, to serve as a member of the Company’s Operating Committee,” and replacing it as follows:

 

“You shall be employed as a Managing Director and the Chief Operating Officer of the Company and shall report directly to the Chief Executive Officer of the Company, and you shall also be appointed, on the Effective Date, to serve as a member of the Company’s Operating Committee.”

 

This letter in no way amends any other terms or conditions of the Agreement, the remainder of which remain in full force and effect.  Please sign below to indicate your acceptance of this amendment to the Agreement.

 

 

 

 

Sincerely,

 

 

 

 

 

COWEN GROUP, INC.

 

 

 

 

 

 

 

 

By:

/s/ J. Kevin McCarthy

 

 

 

J. Kevin McCarthy

 

 

 

General Counsel

 

 

 

 

 

 

AGREED AND ACCEPTED:

 

 

 

 

 

 

 

 

Signed:

/s/ Christopher A. White

 

 

 

Christopher A. White

 

 

 

 

 

Date:

12/10/09

 

 

 




Exhibit 10.14

 

 

BP 599 LEXINGTON AVENUE LLC,

 

Landlord,

 

TO

 

RAMIUS CAPITAL GROUP, LLC,

 

Tenant

 

 

LEASE

 

 

 

Premises at:

 

599 Lexington Avenue

New York, New York

 



 

TABLE OF CONTENTS

 

 

PAGE

 

 

ARTICLE 1 BASIC LEASE PROVISIONS AND ENUMERATION OF EXHIBITS

1

 

 

1.1

INTRODUCTION

1

1.2

BASIC DATA

1

1.3

ENUMERATION OF EXHIBITS

3

1.4

OTHER DEFINITIONS

4

 

 

 

ARTICLE 2 PREMISES

7

 

 

2.1

DEMISE — PREMISES

7

2.2

APPURTENANT RIGHTS AND RESERVATIONS

7

 

 

 

ARTICLE 3 LEASE TERM

8

 

 

3.1

COMMENCEMENT DATE

8

3.2

EXPIRATION DATE

9

3.3

COMMENCEMENT DATE AGREEMENT

9

 

 

 

ARTICLE 4 COMPLETION OF THE PREMISES

9

 

 

4.1

PERFORMANCE OF WORK

9

4.2

QUALITY AND PERFORMANCE OF WORK

10

4.3

TENANT ENTRY

10

4.4

LANDLORD’S CONTRIBUTIONS

11

 

 

 

ARTICLE 5 ANNUAL FIXED RENT AND FIRST MONTH’S RENT

11

 

 

5.1

FIXED RENT

11

5.2

PAYMENT OF FIRST MONTH’S RENT

11

5.3

ADDITIONAL RENT

11

5.4

LATE PAYMENT

12

5.5

RENT CONCESSION

12

 

 

 

ARTICLE 6 ESCALATION

13

 

 

6.1

TAX ESCALATION

13

6.2

OPERATING EXPENSE ESCALATION

15

 

 

 

ARTICLE 7 REPAIRS AND SERVICES

24

 

 

7.1

LANDLORD’S OBLIGATION TO REPAIR

24

7.2

TENANT’S REPAIRS AND MAINTENANCE

25

7.3

SERVICES

26

7.4

LANDLORD’S FAILURE TO REPAIR OF PROVIDE SERVICES

26

 

 

 

ARTICLE 8 ALTERATIONS

26

 

 

8.1

TENANT’S RIGHTS

26

8.2

CONFORMITY WITH LAW

28

8.3

PERFORMANCE OF WORK, GOVERNMENTAL APPROVALS, INSURANCE

29

8.4

LIENS

30

8.5

VIOLATIONS; DISRUPTION

30

8.6

TENANT’S PROPERTY

31

8.7

SURVIVAL

32

 

 

 

ARTICLE 9 LAWS, ORDINANCES, REQUIREMENTS OF PUBLIC AUTHORITIES

32

 

 

9.1

CERTIFICATE OF OCCUPANCY

32

9.2

TENANT’S OBLIGATIONS

32

9.3

TENANT’S RIGHT TO CONTEST

33

 

i



 

9.4

WINDOW CLEANING

34

 

 

 

ARTICLE 10 USE

34

 

 

10.1

OFFICE USE

34

10.2

ADDITIONAL PERMITTED USES

34

10.3

RESTRICTIONS

34

10.4

PROHIBITED USES

35

10.5

LICENSES AND PERMITS

36

 

 

 

ARTICLE 11 INDEMNITY AND INSURANCE

36

 

 

11.1

TENANT’S INDEMNITY

36

11.2

COMMERCIAL GENERAL LIABILITY INSURANCE

37

11.3

OTHER INSURANCE

37

11.4

CERTIFICATES OF INSURANCE

38

11.5

NO VIOLATION OF BUILDING POLICIES

38

11.6

TENANT TO PAY PREMIUM INCREASES

38

11.7

WAIVER OF SUBROGATION

38

11.8

LANDLORD’S INDEMNITY

39

 

 

 

ARTICLE 12 FIRE, CASUALTY OR TAKING

40

 

 

12.1

RIGHT TO TERMINATE LEASE

40

12.2

RESTORATION OF THE PREMISES

41

12.3

PAYMENT OF RENT FOLLOWING CASUALTY

41

12.4

UNINSURED CASUALTY

42

12.5

LANDLORD NOT TO INSURE ALTERATIONS OR TENANT’S PROPERTY

42

12.6

EMINENT DOMAIN — COMPLETE OR SUBSTANTIAL TAKING

42

12.7

EMINENT DOMAIN — PARTIAL TAKING

43

12.8

LANDLORD TO RECEIVE ENTIRE AWARD

44

 

 

 

ARTICLE 13 ASSIGNMENT, SUBLETTING, MORTGAGING

44

 

 

13.1

LANDLORD’S CONSENT REQUIRED

44

13.2

OFFER NOTICE

46

13.3

LANDLORD’S RIGHT TO UNDERLET

47

13.4

LANDLORD’S RIGHT TO TERMINATE

49

13.5

ADDITIONAL CONDITIONS

50

13.6

LANDLORD MAY COLLECT RENT FROM SUBTENANT OR ASSIGNEE

53

13.7

ASSUMPTION OF LEASE

53

13.8

TENANT’S INDEMNIFICATION

53

13.9

TIME LIMITATION; AMENDMENTS

53

13.10

ADDITIONAL RENT DUE UPON ASSIGNMENT OR SUBLETTING

54

13.11

LIABILITY NOT DISCHARGED

55

13.12

EFFECT OF LISTING OF NAMES

55

13.13

SPECIAL RIGHTS FOR ELIGIBLE SUBTENANTS

55

 

 

 

ARTICLE 14 NO LIABILITY OR REPRESENTATIONS BY LANDLORD; FORCE MAJEURE

57

 

 

14.1

NO LIABILITY

57

14.2

NO REPRESENTATIONS BY LANDLORD

59

14.3

FORCE MAJEURE

59

 

 

 

ARTICLE 15 ENTRY, RIGHT TO CHANGE PUBLIC PORTIONS OF THE BUILDING

59

 

 

15.1

LANDLORD’S RIGHT OF ENTRY

59

15.2

LANDLORD’S RIGHT TO CHANGE ENTRIES, ETC.

61

15.3

EXCAVATION

61

 

 

 

ARTICLE 16 ELECTRICITY

61

 

 

16.1

TENANT TO PURCHASE ELECTRICITY

61

 

ii



 

16.2

LANDLORD NOT LIABLE

63

16.3

TENANT NOT TO OVERLOAD CIRCUITS

64

16.4

TENANT NOT TO EXCEED CAPACITY; LIGHT BULBS

64

 

 

 

ARTICLE 17 SUBORDINATION; ASSIGNMENT OF RENTS

64

 

 

17.1

SUBORDINATION TO MORTGAGES, ETC.

64

17.2

RIGHTS OF MORTGAGEES, ETC.

65

17.3

MODIFICATIONS REQUIRED BY LENDERS

65

17.4

ASSIGNMENT OF LEASE TO MORTGAGEE, ETC.

65

17.5

SUBORDINATION OF MORTGAGE, ETC.

66

17.6

NON-DISTURBANCE AGREEMENT

66

 

 

 

ARTICLE 18 CERTAIN ADDITIONAL TENANT COVENANTS

66

 

 

ARTICLE 19 TENANT’S DEFAULT; LANDLORD’S REMEDIES

68

 

 

19.1

TENANT’S DEFAULT

68

19.2

TERMINATION

70

19.3

RE-ENTRY; CONTINUED LIABILITY; RELETTING

72

19.4

LIQUIDATED DAMAGES

74

19.5

RIGHTS IN THE EVENT OF TENANT’S BANKRUPTCY

74

19.6

WAIVER OF REDEMPTION, ETC.

74

19.7

ADDITIONAL RIGHTS OF LANDLORD

75

19.8

LANDLORD’S DEFAULT

76

19.9

FEES

76

 

 

 

ARTICLE 20 MISCELLANEOUS

76

 

 

20.1

WAIVER

76

20.2

CONSENTS; ARBITRATION

77

20.3

QUIET ENJOYMENT

78

20.4

SURRENDER

78

20.5

BROKER

79

20.6

INVALIDITY OF PARTICULAR PROVISIONS

79

20.7

PROVISIONS BINDING, ETC.

79

20.8

NO RECORDING

80

20.9

NOTICES

80

20.10

WHEN LEASE BECOMES BINDING

80

20.11

HEADINGS

81

20.12

SUSPENSION OF SERVICES

81

20.13

RULES AND REGULATIONS

81

20.14

DEVELOPMENT RIGHTS

82

20.15

ESTOPPEL CERTIFICATES

82

20.16

SELF-HELP

83

20.17

HOLDING OVER

83

20.18

RENT CONTROL

84

20.19

COUNTERPARTS

84

20.20

ENTIRE AGREEMENT

84

20.21

NO PARTNERSHIP

84

20.22

SECURITY DEPOSIT

84

20.23

FINANCIAL STATEMENTS

87

20.24

GOVERNING LAW, ETC.

87

20.25

NOTICE OF SUBWAY IMPROVEMENT AGREEMENTS

88

20.26

CONFIDENTIALITY OF LEASE

88

20.27

PATRIOT ACT AND EXECUTIVE ORDER 13224

88

 

 

 

ARTICLE 21 OPTIONS TO EXTEND

89

 

 

21.1

TENANT’S OPTIONS

89

 

iii



 

21.2

EXTENDED TERM RENT

90

21.3

EXTENDED TERM RENT DETERMINATION

90

21.4

RETROACTIVE ADJUSTMENTS

92

 

 

 

ARTICLE 22 AUTOMATIC EXPANSION

93

 

 

22.1

ADDITION OF SPACE

93

22.2

CONDITION AND LANDLORD’S AUTOMATIC EXPANSION SPACE CONTRIBUTION

94

22.3

RENT FOR AUTOMATIC EXPANSION SPACE

95

 

 

 

ARTICLE 23 RIGHT TO LEASE ADDITIONAL SPACE

95

 

 

23.1

TENANT’S RIGHTS TO ADDITIONAL SPACE

95

23.2

NON-AVAILABILITY OF SPACE

96

23.3

RENT FOR OFFERED SPACE

96

 

 

 

ARTICLE 24 23RD FLOOR OPTIONS TO EXPAND

97

 

 

24.1

TENANT’S RIGHTS

97

24.2

CONDITION OF THE 23RD FLOOR EXPANSION SPACE

99

24.3

RENT FOR 23RD FLOOR EXPANSION SPACE

100

 

 

 

ARTICLE 25 18TH FLOOR OPTION TO EXPAND

100

 

 

25.1

TENANT’S 18TH FLOOR RIGHTS

100

25.2

CONDITION OF 18TH FLOOR EXPANSION SPACE

101

25.3

RENT FOR 18TH FLOOR EXPANSION SPACE

101

 

 

 

ARTICLE 26 ROOF RIGHTS

102

 

iv



 

THIS INSTRUMENT IS AN INDENTURE OF LEASE in which the Landlord and the Tenant are the parties hereinafter named, and which relates to space in the building (the “Building”) known as, and with an address at, 599 Lexington Avenue, New York, New York 10022.

 

The parties to this instrument hereby agree with each other as follows:

 

ARTICLE 1

 

BASIC LEASE PROVISIONS AND ENUMERATION OF EXHIBITS

 

1.1                                 INTRODUCTION.  The following sets forth the basic data and identifying Exhibits, elsewhere hereinafter referred to in this Lease, and, where appropriate, constitutes definitions of the terms hereinafter listed.

 

1.2                                 BASIC DATA.

 

Date:

June 22, 2007

 

 

Landlord:

BP 599 LEXINGTON AVENUE LLC,

 

a Delaware limited liability company

 

 

Present Mailing Address of Landlord:

c/o Boston Properties Limited Partnership

599 Lexington Avenue, Suite 1800

New York, New York 10022

 

Attn.:

Robert E. Selsam,

 

 

Senior Vice President

 

 

 

with a copy to:

 

 

 

Matthew W. Mayer

 

Senior Vice President - Regional General Counsel

 

Boston Properties Limited Partnership

 

599 Lexington Avenue, Suite 1800

 

New York, New York 10022

 

 

Landlord’s Construction Representative:

Thomas Hill

Senior Vice President

Boston Properties Limited Partnership

599 Lexington Avenue, Suite 1800

New York, New York 10022

 

 

Tenant:

RAMIUS CAPITAL GROUP, LLC,

 

a Delaware limited liability company

 

1



 

Present Mailing Address of Tenant:

Chrysler Center

666 Third Avenue

New York, New York 10017

Attn.: Marran H. Ogilvie - General Counsel

 

 

Tenant’s Construction Representative:

[To be designated]

 

 

Commencement Date:

As defined in Article 3 hereof.

 

 

Rent Commencement Date:

As defined in Article 5 hereof.

 

 

Expiration Date:

August 31, 2022.

 

 

Lease Term:

As defined in Article 3 hereof.

 

 

Lease Year:

A period of twelve (12) consecutive calendar months, commencing on the first day of January in each year, except that the first Lease Year of the Lease Term shall be the period commencing on the Commencement Date and ending on the succeeding December 31, and the last Lease Year of the Lease Term shall be the period commencing on January l of the calendar year in which the Lease Term ends and ending with the Expiration Date.

 

 

Building:

The building and other improvements erected on the Land known as and by the street number 599 Lexington Avenue, New York, New York.

 

 

Premises:

Initially, the 19th Floor Premises, the 20th Floor Premises and the 21st Floor Premises as described and depicted in Exhibit B hereto.

 

 

Annual Fixed Rent:

As set forth on Exhibit H hereto and made a part hereof.

 

 

Additional Rent:

All charges and other sums payable by Tenant as set forth in this Lease, other than and in addition to Annual Fixed Rent.

 

 

Tenant’s Share:

Initially, 6.81% with respect to Operating Expenses and 6.71% with respect to Taxes, each being equal to a fraction, the numerator of which is the rentable area of the Premises and the denominator of which is the rentable area of the Building for purposes of Operating Expenses or for

 

2



 

 

purposes of Taxes, as appropriate, all as determined in accordance with Exhibit B-1 attached hereto.

 

 

Security Deposit:

An amount equal to twelve (12) months of Annual Fixed Rent calculated at the initial rate of Annual Fixed Rent applicable to each portion of the then current Premises, i.e., initially, Six Million Seven Hundred Forty-Five Thousand Five Hundred Sixty-Nine and 00/100 Dollars ($6,745,569.00), subject to increase and reduction as otherwise provided in this Lease.

 

 

Broker:

CB Richard Ellis, Inc.

 

1.3                                 ENUMERATION OF EXHIBITS.  The following Exhibits are a part of this Lease, are incorporated herein by reference, attached hereto, and are to be treated as a part of this Lease for all purposes.  Undertakings contained in such Exhibits are agreements on the part of Landlord and Tenant, as the case may be, to perform the obligations stated therein.

 

Exhibit A

 

Description of the Land.

 

 

 

 

Exhibit B

 

Floor Plans of Premises.

 

 

 

 

Exhibit B-1

 

Rentable Area.

 

 

 

 

Exhibit C

 

Work Letter.

 

 

 

 

Exhibit D

 

Landlord’s Services.

 

 

 

 

Exhibit E

 

Rules and Regulations.

 

 

 

 

Exhibit F

 

Form of Letter of Credit.

 

 

 

 

Exhibit G

 

Form of Commencement Date Agreement.

 

 

 

 

Exhibit H

 

Schedule of Annual Fixed Rent.

 

 

 

 

Exhibit I

 

Form of Landlord Non-Disturbance Agreement.

 

 

 

 

Exhibit J

 

Form of Mortgagee Subordination, Nondisturbance and Attornment Agreement.

 

3



 

1.4                                 OTHER DEFINITIONS.  The following additional terms, wherever used in this Lease (unless the context requires otherwise), shall have the respective meanings specified in the Sections of this Lease set forth below after such Terms:

 

“18th Floor Expansion Date”

Section 25.1

“18th Floor Expansion Option”

Section 25.1

“18th Floor Expansion Space”

Section 25.1

“19th Floor Commencement Date”

Section 3.1

“19th Floor Premises”

Exhibit B

“19th Floor Rent Commencement Date”

Section 5.5

“19th Floor Rent Concession Period”

Section 5.5

“20th and 21st Floor Commencement Date”

Section 3.1

“20th Floor Rent Commencement Date”

Section 5.5

“20th Floor Rent Concession Period”

Section 5.5

“21st Floor Rent Commencement Date”

Section 5.5

“21st Floor Rent Concession Period”

Section 5.5

“20th Floor Premises”

Exhibit B

“21st Floor Premises”

Exhibit B

“23rd Floor Expansion Date”

Section 24.1

“23rd Floor Expansion Options”

Section 24.1

“23rd Floor Expansion Space”

Section 24.1

“23rd Floor Suite A Automatic Expansion Space”

Section 22.1

“23rd Floor Suite B Automatic Expansion Space”

Section 22.1

“23rd Floor Unit 1 Expansion Space”

Section 24.1

“23rd Floor Unit 2 Expansion Space”

Section 24.1

“23rd Floor Unit 3 Expansion Space”

Section 24.1

“AAA”

Section 6.2

“Affiliate”

Section 13.1

“Alterations”

Section 8.1

“AML Procedures”

Section 20.27

“Attornment Event”

Section 13.13

“Automatic Expansion Date”

Section 22.1

“Automatic Expansion Space”

Section 22.1

“Average Rate”

Exhibit D

“Base Operating Expenses”

Section 6.2

“Base Operating Year”

Section 6.2

“Base Taxes”

Section 6.1

“Building Standard”

Exhibit C

“CPI”

Exhibit D

“Critical Area”

Section 7.4

“Date of the taking”

Section 12.6

“Designation Date”

Section 22.1

“Due date”

Section 5.4

“Electricity Charge”

Section 16.1

“Eligible Sublease”

Section 13.13

“Event of Default”

Section 19.1

“Excess Operating Expenses”

Section 6.2

 

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“Expansion Notice Date”

Section 24.1

“Extension Option”

Section 21.1

“Extended Term”

Section 21.1

“Fair Market Rent”

Section 21.3

“Fair Market Rent Proposal”

Section 21.3

“First Penalty Period”

Section 3.1

“First Refusal Space”

Section 23.1

“Force Majeure”

Section 14.3

“Fourth Penalty Period”

Section 3.1

“GAAP”

Section 6.2

“Initial Tonnage”

Exhibit D

“Initiating Party”

Section 21.3

“Land”

Section 2.1

“Landlord Parties”

Section 11.7

“Landlord’s 18th Floor Expansion Notice”

Section 25.1

“Landlord’s 23rd Floor Expansion Acceleration Notice”

Section 24.1

“Landlord’s 30-Day Completion Period”

Section 12.2

“Landlord’s Contribution”

Exhibit C

“Landlord’s Demolition Contribution”

Exhibit C

“Landlord’s Non-Disturbance Agreement”

Section 13.13

“Landlord’s Service Failure”

Section 7.4

“Laws”

Section 6.2

“Lease Interest Rate”

Section 5.4

“Letter”

Section 20.22

“Letter of Credit”

Section 20.22

“Lien”

Section 8.4

“Notice”

Section 20.9; Exhibit C

“Notice of Intent to Terminate”

Section 12.2

“Marketing Notice”

Section 13.2

“Material Portion”

Section 7.4

“Minor Alterations”

Section 8.1

“Mortgagee”

Section 17.1

“Net Effective Consideration”

Section 13.5

“Occupancy Requirement”

Section 21.1

“OFAC”

Section 20.27

“Offer Notice”

Section 13.2

“Offered Space”

Section 23.1

“Operating Days”

Exhibit D

“Operating Expenses”

Section 6.2

“Operating Hours”

Exhibit D

“Operating Statement”

Section 6.2

“Operating Year”

Section 6.2

“Original Delivery Date”

Section 3.1

“Original Tenant”

Section 13.1

“Outside Date”

Section 3.1

“Overlandlord”

Section 17.1

 

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“Overtime Service”

Exhibit D

“Plans and Specifications”

Exhibit C

“Pre-Built Lease”

Section 24.1

“Pre-Built Lease Expiration Date”

Section 24.1

“Prime Rate”

Section 5.4

“Prohibited Person”

Section 20.27

“Property”

Section 6.2

“Pro-Rata Fraction”

Section 22.2

“Qualified Appraiser”

Section 21.3

“RamiusB Space”

Section 22.1

“Reduction Date”

Section 20.22

“Reduction Period”

Section 20.22

“rent”

Section 5.3

“Rent Commencement Date”

Section 5.5

“Rent Concession Period”

Section 5.5

“Replacement Letter”

Section 20.22

“Responding Party”

Section 21.3

“Rules and Regulations”

Section 20.13

“Second Penalty Period”

Section 3.1

“SNDA”

Section 17.6

“Space Occupant”

Section 13.1

“Special Lease Rights”

Section 13.13

“Special Permit”

Section 20.24

“substantially all of the Premises”

Section 13.3

“substantially the entire remaining Lease Term”

Section 13.3

“Specialty Alterations”

Section 8.1

“Tax Excess”

Section 6.1

“Taxes”

Section 6.1

“Tax Expenses”

Section 6.1

“Tax Refund”

Section 6.1

“Tax Year”

Section 6.1

“Telecommunications Equipment”

Article 26

“Tenant Parties”

Section 11.7

“Tenant’s Architect”

Exhibit C

“Tenant’s Cost”

Exhibit C

“Tenant’s Property”

Section 8.6

“Tenant’s Work”

Exhibit C

“Third Penalty Period”

Section 3.1

“Third Qualified Appraiser”

Section 21.3

“Transfer Notice”

Section 13.2

“Transit Authority Agreement”

Section 20.24

“Underlying Lease”

Section 17.1

“Work Letter”

Exhibit C

 

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ARTICLE 2

 

PREMISES

 

2.1                                 DEMISE — PREMISES.  Landlord hereby demises and leases to Tenant, and Tenant hereby takes and hires from Landlord, a portion of the Building erected on the land (the “Land”) more particularly described in Exhibit A hereto, which portion of the Building (the “Premises”) is depicted in the floor plan(s) annexed hereto as Exhibit B, for the term hereinafter stated, for the rent hereinafter reserved and upon and subject to the covenants, agreements, terms, conditions, limitations, exceptions and reservations contained in this Lease.

 

2.2                                 APPURTENANT RIGHTS AND RESERVATIONS.

 

(a)                                  Tenant shall have, as appurtenant to the Premises, the non-exclusive right to use in common with others, subject to reasonable rules of general applicability to each tenant of the Building from time to time made by Landlord of which Tenant is given notice:  (i) the common lobbies, corridors, stairways and elevators of the Building, (ii) if the Premises includes less than the rentable floor area of any floor, the common toilets, corridors and elevator lobby of such floor and (iii) subject to the terms of the Work Letter and Article 8 hereof, a reasonable amount of space in Building shafts and conduits and in communication and electrical closets located on the floors of the Premises for Tenant’s reasonable telecommunications requirements including, without limitation, a reasonably sufficient pathway from the point where such telecommunications lines enter the Building to the Premises and from the Premises to its Telecommunications Equipment (as defined in Article 26 hereof) on the roof.

 

(b)                                 Landlord reserves the right from time to time:  (i) to install, use, maintain, repair, replace and relocate, for service to the Premises and/or other parts of the Building, shafts, pipes, ducts, conduits, wires, risers and other facilities and appurtenant fixtures, in the Premises or in other parts of the Building, and (ii) to alter or relocate other common facilities, whether located in the Premises or in other parts of the Building; provided that, with respect to clauses (i) and (ii):  (A) any replacements, substitutions or alterations are, in the reasonable opinion of Landlord, substantially equivalent to or better than then-existing facilities, (B) installations, replacements and relocations shall be located so far as practicable in the central core area of the Building, above ceiling surfaces, below floor surfaces, within perimeter walls of the Premises or otherwise in boxed enclosures immediately adjacent to perimeter walls, (C) all such work within the Premises shall be performed at such times and in such manner, as to create the least practicable interference with Tenant’s use of the Premises, it being understood that the foregoing shall in no event obligate Landlord to do such work on an “overtime” basis unless such work will materially interfere with Tenant’s business operations in the Premises, provided, however, that Landlord shall not be required to perform such work on an “overtime” basis to the extent that such work was requested by Tenant or would not have been needed but for a violation by Tenant of its obligations under this Lease, (D) no such work shall reduce the square footage of the floor area of the Premises in excess of one-half percent (1/2%) (unless Landlord shall make an appropriate reduction in Annual Fixed Rent to reflect such excess reduction in square footage of the Premises), (E) other than as required by law, no such work shall reduce the usable square footage of the floor area of the Premises by more than one percent (1%), (F) Landlord shall repair or restore, as appropriate, the portions of the Premises affected by such work and (G) such

 

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installations, replacements and relocations shall not materially adversely interfere with the use or manner of use of the Premises permitted under this Lease, it being agreed that any material adverse interference with Tenant’s use of any Critical Areas (as such term is defined below) which prevents Tenant from conducting its normal business operations in the Premises as a whole shall be deemed to constitute material adverse interference with the Premises as a whole.  Except in the case of emergencies, Landlord agrees to give Tenant reasonable advance notice of any of the foregoing activities which require work in the Premises.

 

ARTICLE 3

 

LEASE TERM

 

3.1                                 COMMENCEMENT DATE.

 

(a)                                  The term of this Lease and the estate hereby granted (the “Lease Term”) shall commence on (i) August 1, 2007 for the 20th Floor Premises and the 21st Floor Premises (the “20th and 21st Floor Commencement Date”), and (ii) September 1, 2007 for the 19th Floor Premises (the “19th Floor Commencement Date”), provided that the respective Premises shall have been delivered to Tenant on the applicable Commencement Date.  The 19th Floor Commencement Date and the 20th and 21st Floor Commencement Date are sometimes each referred to herein as a “Commencement Date” and collectively as the “Commencement Dates”. Landlord shall use reasonable efforts to deliver possession of the applicable Premises to Tenant on the applicable Commencement Date (each an “Original Delivery Date”).  If Landlord fails to deliver possession of the applicable Premises on the applicable Commencement Date for any reason beyond Landlord’s reasonable control, Landlord shall use reasonable efforts to deliver possession of the applicable Premises to Tenant as soon thereafter as shall be reasonably possible and such Commencement Date shall be deemed to be the first (1st) day thereafter that actual possession is so delivered (provided that Landlord shall have given Tenant not less than ten (10) Operating Days prior notice of such revised delivery date) and, except as otherwise set forth in Section 3.1(b) through (f) below, the postponement of the applicable Commencement Date shall be Tenant’s sole remedy at law or in equity (Tenant hereby waiving any right to rescind this Lease and/or to recover any damages for such delay, except as otherwise set forth in Section 3.1(b) through (f) below), but in no event shall the 20th and 21st Floor Commencement Date be later than the 19th Floor Commencement Date.  The foregoing is intended to be “an express provision to the contrary” under Section 223-a of the New York Real Property Law or any successor statute of similar import.

 

(b)                                 If the 19th Floor Commencement Date shall occur more than thirty (30) days after the 20th and 21st Floor Commencement Date (the “Outside Date”), which Outside Date shall be extended by reason of Force Majeure (but not by reason of a holdover by the then existing tenant therein), the 20th Floor Rent Concession Period (hereinafter defined) and the 21st Floor Rent Concession Period (hereinafter defined) shall be increased by one (1) day for each day beyond the Outside Date that Landlord fails to deliver possession of the 19th Floor Premises.

 

(c)                                  If a Commencement Date shall occur more than thirty (30) but within sixty (60) days (the “First Penalty Period”) after the applicable Original Delivery Date, which Original Delivery Date shall be extended by reason of Force Majeure (but not by reason of a

 

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holdover by the then existing tenant therein), the Rent Concession Period applicable to such portion of the Premises shall be increased by one-half (1/2) day for each day during the First Penalty Period that Landlord fails to deliver possession of such portion of the Premises.

 

(d)                                 If a Commencement Date shall occur more than sixty (60) but within ninety (90) days (the “Second Penalty Period”) after the applicable Original Delivery Date, which Original Delivery Date shall be extended by reason of Force Majeure (but not by reason of a holdover by the then existing tenant therein), the Rent Concession Period applicable to such portion of the Premises shall be increased by one (1) day for each day during the Second Penalty Period that Landlord fails to deliver possession of such portion of the Premises.

 

(e)                                  If a Commencement Date shall occur more than ninety (90) but within one hundred twenty (120) days (the “Third Penalty Period”) after the applicable Original Delivery Date, which Original Delivery Date shall be extended by reason of Force Majeure (but not by reason of a holdover by the then existing tenant therein), the Rent Concession Period applicable to such portion of the Premises shall be increased by one and one-half (1 1/2) days for each day during the Third Penalty Period that Landlord fails to deliver possession of such portion of the Premises.

 

(f)                                    If a Commencement Date shall occur more than one hundred twenty (120) days after the applicable Original Delivery Date (the “Fourth Penalty Period”), which Original Delivery Date shall be extended by reason of Force Majeure (but not by reason of a holdover by the then existing tenant therein), the Rent Concession Period applicable to such portion of the Premises shall be increased by two (2) days for each day during the Fourth Penalty Period that Landlord fails to deliver possession of such portion of the Premises.

 

3.2                                 EXPIRATION DATE.  The Lease Term shall end on the Expiration Date, as the same may be extended pursuant to the provisions of Article 21 below, or shall end on such earlier date upon which the Lease Term may expire or be terminated pursuant to any of the conditions of limitation or other provisions of this Lease or pursuant to law.

 

3.3                                 COMMENCEMENT DATE AGREEMENT.  As soon as may be convenient after each Commencement Date and Rent Commencement Date has been determined, Landlord and Tenant agree to join with each other in the execution of a written agreement, in the form of Exhibit G hereto, in which each Commencement Date, Rent Commencement Date and specified Lease Term of this Lease shall be stated, but the failure by either party to so execute or deliver such agreement shall not in any way reduce the respective obligations or rights of Landlord or Tenant under this Lease.

 

ARTICLE 4

 

COMPLETION OF THE PREMISES

 

4.1                                 PERFORMANCE OF WORK

 

(a)                                  Tenant has inspected the Premises and except as otherwise described in this Section 4.1, the Premises are being leased in “AS IS” broom clean condition, without

 

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representation or warranty by Landlord.  Tenant acknowledges that, except as otherwise described in this Section 4.1, any work necessary to prepare the Premises for Tenant’s occupancy shall be performed solely by Tenant in accordance with the provisions of this Lease, including, without limitation, Exhibit C attached hereto.

 

(b)                                 On or before each Commencement Date, Landlord shall provide Tenant with ACP-5 documentation confirming that there is no asbestos or asbestos-containing material requiring remediation within the applicable portion of the Premises.

 

(c)                                  Landlord represents that, on each Commencement Date (i) the applicable portion of the Premises shall be free of hazardous substances which would violate applicable laws or governmental regulations and (ii) the applicable portion of the Premises and the Building shall be free of violations of law or governmental regulations which would prevent Tenant from obtaining permits for, or performing, Tenant’s Work.

 

(d)                                 Landlord shall make all of the mid-rise passenger elevators servicing the 19th Floor Premises operational prior to the date that Tenant occupies the 19th Floor Premises for the conduct of its business.

 

(e)                                  Landlord shall make available to Tenant in connection with Tenant’s Work, a connection point on each floor of the Premises to the Building sprinkler riser and a reasonable number of connection points to the Building fire/life safety system.

 

4.2                                 QUALITY AND PERFORMANCE OF WORK.  All construction work required or permitted by this Lease shall be done in a good and workmanlike manner and in compliance with all applicable laws and requirements of public authorities and insurance bodies related to, or arising out of the performance of, such construction work.  Each party may inspect the work of the other upon advance notice at reasonable times (except in the event of an emergency), and the Construction Representative of each party shall be authorized to give notice of any approvals and other actions on the party’s behalf required to be given in connection with design and construction.

 

4.3                                 TENANT ENTRY.  Prior to the Commencement Date, Landlord shall permit Tenant to access the (a) 19th Floor Premises and the 20th Floor Premises upon reasonable prior notice to Landlord during non-Operating Hours (provided that Landlord shall use reasonable efforts to provide access during Operating Hours upon Tenant’s request) and (b) the 21st Floor Premises on an as needed basis upon reasonable prior notice to Landlord, in all events solely for the purpose of inspecting the same and taking measurements in preparation for the performance of Tenant’s Work.  Any such entry shall be at Tenant’s sole risk and subject to the rights of any existing occupant, and Landlord shall not be responsible for any damage or loss to property or installations placed in the Premises or caused by Tenant.  In addition, in no event shall Tenant make use of any labor in the Building or otherwise suffer or permit any action to be taken which would result in labor difficulties or otherwise delay the performance of any other work.  Tenant shall indemnify and hold Landlord harmless from and against any and all loss, costs, damages, liabilities, expenses and claims resulting from Tenant’s entry onto the Premises prior to the Commencement Date.

 

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4.4                                 LANDLORD’S CONTRIBUTIONS.  Landlord agrees to pay to Tenant, as a contribution towards Tenant’s Cost (as defined in Exhibit C), Landlord’s Contribution and Landlord’s Demolition Contribution (as defined in Exhibit C), subject to the terms and conditions of Exhibit C.

 

ARTICLE 5

 

ANNUAL FIXED RENT AND FIRST MONTH’S RENT

 

5.1                                 FIXED RENT.  Tenant agrees to pay to Landlord on the Commencement Date (but subject to the provisions of Section 5.2 and Section 5.5) and thereafter monthly, in advance, on the first day of each and every calendar month during the Lease Term, a sum equal to one-twelfth of the Annual Fixed Rent specified in Section 1.2 hereof in lawful money of the United States, without any set-off or deduction whatsoever, except as otherwise expressly set forth in this Lease.  Until notice of some other designation is given, Annual Fixed Rent and all other charges for which provision is herein made shall be paid by remittance to or to the order of “BP 599 Lexington Avenue LLC” at the following address:  BP 599 Lexington Avenue LLC, P.O. Box 823290, Philadelphia, PA 19182-3290 (but in no event shall the address for the payment of rent by mail be located outside the continental United States of America).  Except to the extent Landlord and Tenant shall otherwise mutually agree, all remittances by Tenant shall be drawn on a member bank or participant bank of The Clearing House Association, or on such other bank with offices in Manhattan as may be reasonably approved by Landlord and which provides similar availability of usable funds to Landlord.  Any payment by wire transfer should be directed as follows:  Wells Fargo Bank, N.A., National Bank, San Francisco, CA 94105, ABA # 121 000 248, Account # 4121486716, Account Name:  BP 599 Lexington Avenue LLC FBO JPMorgan Chase.

 

5.2                                 PAYMENT OF FIRST MONTH’S RENT.  Tenant has, simultaneously with the execution and delivery of this Lease, paid to Landlord an amount equal to one-twelfth of the Annual Fixed Rent for the entire Premises, to be applied to the first installment(s) of Annual Fixed Rent due under this Lease.  Landlord shall hold the amount paid by Tenant under this Section 5.2 in trust until the same is applied pursuant to this Section or any other provision of this Lease.

 

5.3                                 ADDITIONAL RENT.  All amounts over and above, or in addition to, the Annual Fixed Rent which are payable by Tenant to Landlord under the terms of this Lease or otherwise in connection with the use and occupancy of the Premises including, without limitation, sums payable for work requested by Tenant and performed by Landlord or Landlord’s agents, shall be deemed Additional Rent hereunder and shall be paid by Tenant in lawful money of the United States, without any set-off or deduction whatsoever, except as otherwise expressly set forth in this Lease, and otherwise in the same manner as an installment of the Annual Fixed Rent as elsewhere provided in this Lease; and Landlord shall have all the rights and remedies in the event of the non-payment thereof as it would have had in the event of the non-payment of any installment of the Annual Fixed Rent.  Tenant’s obligation to pay any Annual Fixed Rent or any Additional Rent which shall have theretofore become due and payable shall survive the expiration or earlier termination of this Lease.  (The Annual Fixed Rent and Additional Rent are sometimes collectively referred to in this Lease as “rent.”)  Rent for any partial months during

 

11



 

the Lease Term shall be prorated on a per diem basis.  Except as otherwise expressly set forth in this Lease, to the extent that Tenant shall fail to dispute any invoice for Additional Rent within twelve (12) months after receipt thereof, such invoice shall be conclusive and binding upon Tenant and Tenant shall be deemed to have waived any right to dispute the same.

 

5.4                                 LATE PAYMENT.

 

(a)                                  If Landlord shall not have received any payment or installment of rent on or before the “due date” (hereinafter defined), the amount of such payment or installment shall bear interest from the due date through and including the date such payment or installment is received by Landlord, at a rate (the “Lease Interest Rate”) equal to the lesser of (i) the rate announced by Citibank, N.A. or its successor from time to time as its prime or base rate (the “Prime Rate”), plus two percent (2%), or (ii) the maximum applicable legal rate, if any; provided, however, that no interest shall be due with respect to the first late payment in any Lease Year, unless such payment is made more than ten (10) days after the applicable due date.  Such interest shall be deemed Additional Rent and shall be paid by Tenant to Landlord upon demand.

 

(b)                                 If Tenant shall not have received any payment or installment due and owing from Landlord on or before the “due date”, including, without limitation, any portion of Landlord’s Contribution, the amount of such payment or installment shall bear interest from the thirtieth (30th) day after Tenant gives Landlord written notice that such payment is due through and including the date such payment or installment is received by Tenant, at a rate equal to the lesser of (i) the Lease Interest Rate or (ii) the maximum applicable legal rate, if any.

 

(c)                                  The “due date” is the date on which any payment or installment of any financial obligation as set forth in this Lease first becomes payable by Tenant or Landlord under this Lease.

 

5.5                                 RENT CONCESSION.  Anything contained in this Article to the contrary notwithstanding, provided no Event of Default exists, Landlord hereby waives payment of Annual Fixed Rent:

 

(a)                                  for the 19th Floor Premises, for the period (the “19th Floor Rent Concession Period”) from and including the 19th Floor Commencement Date through and including the date preceding the date which is one hundred ninety-six (196) days after the 19th Floor Commencement Date (the “19th Floor Rent Commencement Date”);

 

(b)                                 for the 20th Floor Premises, for the period (the “20th Floor Rent Concession Period”) from and including the 20th and 21st Floor Commencement Date through and including the date preceding the date which is one hundred ninety-six (196) days after the 20th and 21st Floor Commencement Date (the “20th Floor Rent Commencement Date”); and

 

(c)                                  for the 21st Floor Premises, for the period (the “21st Floor Rent Concession Period”) from and including the 20th and 21st Floor Commencement Date through

 

12



 

and including the date preceding date which is one hundred eighty-one (181) days after the 20th and 21st Floor Commencement Date (the “21st Floor Rent Commencement Date”).

 

The 19th Floor Rent Concession Period, the 20th Floor Rent Concession Period and the 21st Floor Rent Concession Period are sometimes individually referred to herein as a “Rent Concession Period”.  The 19th Floor Rent Commencement Date, the 20th Floor Rent Commencement Date and the 21st Floor Rent Commencement Date are sometimes individually referred to herein as a “Rent Commencement Date”.

 

ARTICLE 6

 

ESCALATION

 

6.1                                 TAX ESCALATION.

 

6.1.1                        DEFINITIONS.  For the purposes of this Section 6.1, the following terms shall have the respective meanings set forth below:

 

(a)                                  “Taxes” shall mean the aggregate amount of all real estate and personal property taxes and any general or special assessments (exclusive of penalties thereon but inclusive of interest on assessments payable in installments) assessed or imposed upon or with respect to the Building and the Land and including, without limitation, (i) taxes or assessments made upon or with respect to any development rights now or hereafter appurtenant to or used in connection with the construction of the Building, (ii) any fee, tax or charge imposed by any governmental authority for, on or in respect of any vaults, vault space or other space within or outside the boundaries of the Land, (iii) any assessments for public improvement or benefit to the Building, the Land, or the locality in which the Land is situated, and (iv) any tax, assessment or charge imposed on or with respect to any fixtures, equipment or personal property serving or used in connection with the Building or the Land.  There shall be excluded from Taxes all income, estate, succession, inheritance, transfer and franchise taxes imposed upon Landlord; provided, however, that if at any time during the Lease Term the method of taxation of real estate shall be changed and as a result any other tax or assessment, however denominated and including, without limitation, any franchise, income, profit, use, occupancy, gross receipts or rental tax, shall be imposed upon Landlord or the owner of the Building and the Land, or the rents or income therefrom, in substitution for or in addition to, in whole or in part, any of the taxes or assessments listed in the preceding sentence, such other tax or assessment shall be included in and deemed part of Taxes, but only to the extent that the same would be payable if the Building, the Land and all appurtenances thereto (including development rights) were the only property of Landlord.  The amount of any special assessments for public improvements or benefits to be included in Taxes for any year, in the case where the same may, at the option of the taxpayer, be paid in installments, shall be limited to the amount of the installment due in respect of such year, together with any interest payable in connection therewith (other than interest payable by reason of the delinquent payment of such installment).

 

(b)                                 “Tax Year” shall mean each period from July 1 through June 30 (or such other fiscal period as may hereafter be adopted by the City of New York as the fiscal

 

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year for any tax, levy or charge included in Taxes), any part or all of which occurs during the Lease Term.

 

(c)                                  “Base Taxes” shall mean the actual Taxes for the 2008 calendar year, which shall mean the sum of (i) fifty percent (50%) of the actual Taxes for the Tax Year commencing on July 1, 2007 and ending on June 30, 2008, plus (ii) fifty percent (50%) of the actual Taxes for the Tax Year commencing on July 1, 2008 and ending on June 30, 2009.

 

(d)                                 “Tax Expenses” shall mean all expenses, including, without limitation, reasonable attorney’s fees and disbursements and experts’ and other witnesses’ fees, incurred by Landlord in seeking to reduce the amount of any assessed valuation of the Land and/or Building, in contesting the amount or validity of any Taxes, or in seeking a refund of Taxes for any Tax Year falling within the Lease Term.

 

6.1.2                        TENANT’S SHARE OF TAXES.  From and after the Commencement Date, if the Taxes for any full Tax Year falling within the Lease Term shall exceed the Base Taxes, or if, in the case of a Tax Year only a fraction of which is included in the Lease Term, an amount of the Taxes for such Tax Year multiplied by such fraction exceeds the Base Taxes multiplied by such fraction (the amount of such excess in either case being hereafter referred to as the “Tax Excess”), then Tenant shall pay to Landlord, as Additional Rent, Tenant’s Share of the Tax Excess.  From and after the Commencement Date, Tenant shall also pay to Landlord, as Additional Rent, Tenant’s Share of Tax Expenses applicable to the reduction of Taxes for a Tax Year for which Tenant shall have been required to pay Tenant’s Share of the Tax Excess.  Tenant’s Share of the Tax Excess and Tax Expenses for each Tax Year shall be payable in monthly installments as follows:

 

(a)                                  Estimated payments by Tenant on account of Taxes and Tax Expenses shall be made on the first day of each and every calendar month during the Lease Term, and otherwise in the same fashion herein provided for the payment of Annual Fixed Rent.  The monthly amount so to be paid to Landlord shall be sufficient to provide Landlord by the time Taxes and Tax Expenses are due a sum equal to Tenant’s required payments, as estimated by Landlord from time to time, on account of Taxes and Tax Expenses for the then current Tax Year.  Promptly after receipt by Landlord of bills for such Taxes and Tax Expenses, Landlord shall advise Tenant of the amount thereof and the computation of Tenant’s payment on account thereof.  If estimated payments theretofore made by Tenant for the Tax Year covered by such bills exceed the required payments on account thereof for such Tax Year, Landlord shall, within thirty (30) days after the determination of such overpayment has been made, credit the amount of overpayment against subsequent obligations of Tenant on account of Taxes and Tax Expenses (or refund such overpayment if the Lease Term has ended and Tenant has no further obligation to Landlord); but if the required payments on account thereof for such Tax Year are greater than estimated payments theretofore made on account thereof for such Tax Year, Tenant shall make payment to Landlord within thirty (30) days after being so advised by Landlord.  Tenant’s Share of Tax Expenses for each Tax Year shall, at Landlord’s option, be payable on a monthly basis as provided above, or at such other time as Landlord shall render a statement therefor, provided that no payment shall be due on less than thirty (30) days notice.

 

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(b)                                 If the Taxes for any Tax Year shall equal or be less than the Base Taxes, Tenant shall not be obligated to make any payments to Landlord pursuant to this Section 6.1 in respect of a Tax Excess for such Tax Year, but in no event shall Tenant be entitled to any refund or reduction in the Annual Fixed Rent by reason of such fact.

 

(c)                                  It is understood that the provisions of this Section 6.1 are based upon the method of payment of New York City real property taxes in effect at the date of this Lease, to wit, in semi-annual installments in advance on the first days of July and January of each Tax Year.  If such method of payment is hereafter changed, Landlord shall have the right to change the method by which Tenant pays Tenant’s Share of a Tax Excess to a method of periodic payments which provides Landlord with the full amount of Tenant’s Share of such Tax Excess in respect of any installment of Taxes by the date on which such installment becomes due, provided that a majority of all of the tenants in the Building shall be similarly obligated.

 

6.1.3                        Only Landlord shall have the right to institute tax reduction or other proceedings to reduce the assessed valuation of the Land and Building.  Should Landlord be successful in any such reduction proceedings and obtain a rebate, credit or reduction in assessment or tax payment (with any of the foregoing being hereinafter referred to as a “Tax Refund”) for any Tax Year or Years in respect of which Tenant shall have made a payment to Landlord, pursuant to this Section 6.1, Landlord shall credit Tenant’s Share of such Tax Refund (or, in the case of a Tax Refund for a Tax Year, only a fraction of which is included in the Lease Term, such fraction thereof) against the monthly installment or installments of Annual Fixed Rent next falling due under this Lease, or if the Lease Term has then expired and Tenant has no further obligations to Landlord, such amount shall be refunded by Landlord to Tenant within thirty (30) days after Landlord’s receipt of such Tax Refund.  In calculating the amount of any such credit or payment, Landlord shall have the right to deduct from such Tax Refund all of Landlord’s reasonable and actual Tax Expenses for such Tax Year incurred by Landlord in obtaining the same, to the extent not previously paid by Tenant or other tenants in the Building (so that no double recovery of Tax Expenses shall be permitted).  The provisions of this subsection 6.1.3 shall survive the expiration of the Lease Term.

 

6.2                                 OPERATING EXPENSE ESCALATION.

 

6.2.1                        DEFINITIONS.  For the purposes of this Section 6.2, the following terms shall have the respective meanings set forth below:

 

(a)                                  “Base Operating Expenses” shall mean the actual Operating Expenses for the Base Operating Year.

 

(b)                                 “Base Operating Year” shall mean the calendar year commencing on January 1, 2008 and ending on December 31, 2008.

 

(c)                                  “Operating Expenses” shall mean the aggregate of all reasonable costs and expenses (including taxes, if any, thereon) actually paid or incurred by or on behalf of Landlord (whether directly or through independent contractors) in connection with the operation and maintenance of the Property (as hereinafter defined), including all reasonable expenses incurred by Landlord as a result of its compliance with any of its obligations under Sections 7.1

 

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and 7.3 hereof, but excluding those items set forth as excluded from Operating Expenses at the end of this subsection 6.2.1(b) or otherwise limited elsewhere in this subsection 6.2.1(b).  Operating Expenses shall be calculated on the accrual basis of accounting (but subject to the further provisions of this Section 6.2) and shall include, without limitation, the following expenses:

 

(i)                                     salaries, wages, medical, surgical and general welfare benefits (including group life insurance), pension and welfare payments or contributions and all other fringe benefits paid to, for or with respect to all persons (whether they be employees of Landlord or its managing agent, and, with respect to employees who are not employed on a full-time basis with respect to the Property, only a pro rata portion of expenses allocable to the time any such employee is employed with the Property shall be included in Operating Expenses) for their services in the operation (including, without limitation, security services), maintenance, repair, or cleaning of the Property (but only if and to the extent that the same shall not be included in the management fees payable by Landlord), and payroll taxes, workers’ compensation, uniforms and dry cleaning costs for such persons;

 

(ii)                                  payments under service contracts with independent contractors for operating (including, without limitation, providing security services), maintaining, repairing or cleaning of the Property or any portion thereof or any fixtures or equipment therein, including, without limitation any escalators and/or elevators that may be required under the Special Permit and/or the Transit Authority Agreement;

 

(iii)                               all costs or charges for steam, heat, ventilation, air conditioning and water (including sewer rents) furnished to the Property and/or used in the operation of the Property and all costs or charges for electricity furnished to the public and service areas of the Property and/or used in the operation of the service facilities of the Property, including any taxes on any such utilities;

 

(iv)                              repairs and replacements which are appropriate to the continued operation of the Property as a first-class Manhattan office building, provided that to the extent the cost of any such repair and/or replacement is required to be capitalized under generally accepted accounting principles consistently applied (“GAAP”), such cost shall not be included in Operating Expenses except as set forth in subsection (x) of this Section 6.2.1(b), and, with respect to replacements, the amortized cost thereof shall be included in Operating Expenses only if and to the extent that a prudent owner of a first-class Manhattan office building would install the relevant replacements in lieu of performing further repairs to the replaced items;

 

(v)                                 costs of lobby decoration, painting and decoration of non-tenant areas;

 

(vi)                              cost of snow removal and landscaping in and about the Property;

 

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(vii)                           cost of building and cleaning supplies and equipment, cost of replacements for tools and equipment used in the operation, maintenance and repair of the Property and charges for general telephone service for the Building;

 

(viii)                        financial expenses incurred in connection with the operation of the Property, such as insurance premiums (including, without limitation, liability insurance, fire and casualty insurance, rent insurance and any other insurance that is then generally carried by owners of comparable first-class office buildings in Manhattan), reasonable attorneys’ fees and disbursements (excluding any such fees and disbursements incurred in applying for any Tax Refund or in connection with leasing of space in the Property, or in connection with any disputes between Landlord and any tenant or other occupant of space in the Property), auditing and other professional fees and expenses, Landlord’s reasonable home office accounting charges reasonably allocated to the Building (provided however that such charges shall not be included in Operating Expenses if the services are actually being provided by third parties and such third party costs are included in Operating Expenses), association dues and any other ordinary and customary financial expenses incurred in connection with the operation of the Property;

 

(ix)                                management fees payable to a management company which is unrelated to Landlord or, if to a management company which is owned or affiliated with Landlord or Landlord’s principals, (1) the annual management fee shall not exceed two percent (2%) of the aggregate rents and additional rents (excluding rent attributable to the actual cost of electric power) paid to Landlord by tenants of the Building in such Operating Year, and (2) an amount equal to the same percentage of the aggregate rents and additional rents (excluding rent attributable to the actual cost of electric power) paid to Landlord by tenants of the Building in the Base Operating Year shall be deemed to be the annual management fee for the Base Operating Year, so that Tenant shall be responsible only for the incremental increases in the amount of such management fee above the amount included in the Base Operating Expenses;

 

(x)                                   the cost of capital improvements made by Landlord either (1) reasonably anticipated by Landlord to reduce Operating Expenses (based on Landlord’s estimate that the savings in Operating Expenses are likely to exceed the annual amortization of such capital improvement), or (2) pursuant to a requirement of law, ordinance, order, rule or regulation of any public authority having jurisdiction of the Property (collectively, “Laws”) hereafter enacted or promulgated (including the cost of compliance with Laws enacted or promulgated prior to the date of this Lease if such compliance is required for the first time by reason of any amendment, modification or reinterpretation thereof which is imposed or enacted after the date of this Lease), in either case calculated as follows:  the cost of any such capital improvement shall be included in Operating Expenses for the Operating Year in which such improvement was made, provided that to the extent the cost of such capital improvement is required to be capitalized under GAAP, such cost shall be amortized on a straight-line basis over the useful life thereof utilized under GAAP, and the annual amortization of such capital improvement, together with interest on the unamortized balance of such cost at the Prime Rate shall be included in Operating Expenses;

 

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(xi)                                rental payments made for equipment used in the operation and maintenance of the Property;

 

(xii)                             the cost of governmental licenses and permits, or renewals thereof, necessary for the operation of the Property; and

 

(xiii)                          all other reasonable and necessary expenses paid in connection with the operation, maintenance, repair and cleaning of the Property which are properly chargeable against income.

 

Any cost or expenses of the nature described above shall be included in Operating Expenses for any Operating Year no more than once, notwithstanding that such cost or expenses may fall under more than one of the categories listed above.  Subject to the limitation set forth in subdivision (ix) above, Landlord may use related or affiliated entities to provide services or furnish materials for the Property provided that the rates or fees charged by such entities are competitive with those charged by unrelated or unaffiliated entities in the Borough of Manhattan for the same services or materials, and any rates and fees charged by such entities shall reflect only the services or materials furnished for this Property.

 

The following costs and expenses shall be excluded from Operating Expenses:

 

(1)                                  Taxes and Tax Expenses;

 

(2)                                  franchise, income, transfer gains, inheritance or other personal taxes imposed upon Landlord;

 

(3)                                  mortgage or other interest and/or debt service on the Property as a result of financing and refinancing;

 

(4)                                  legal fees, space planner’s fees, architect’s fees, leasing and brokerage commissions, advertising and promotional expenditures and any other expense incurred in connection with leasing of space in the Property (including new leases, lease amendments, lease terminations and lease renewals);

 

(5)                                  capital improvements to the Property other than those provided in clause (iv) and clause (x) above;

 

(6)                                  the cost of electrical energy furnished directly to tenants of the Property or any other space leased or available for lease in the Property;

 

(7)                                  the cost of tenant installations , improvements or other alterations, and decorations incurred in connection with preparing space for any tenant, including any utilities, fees or services incurred in connection with the performance of such work or other consideration paid by Landlord on account of, with respect to, or in lieu of, such work;

 

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(8)                                  salaries and fringe benefits of personnel above the grade of building manager;

 

(9)                                  rent and other payments payable under any Underlying Lease;

 

(10)                            the cost of any items to the extent to which such cost is reimbursed (or reimbursable) to Landlord by tenants of the Property (other than pursuant to this Section 6.2), insurance or condemnation proceeds or third parties;

 

(11)                            depreciation of the building, amortization (except as provided in clauses (iv) and (x) above) and other non-cash charges.

 

(12)                            the cost of repairs or replacements incurred by reason of fire or other casualty, or condemnation, except to the extent of commercially reasonable insurance deductibles to the extent applicable to an insured loss;

 

(13)                            legal and other professional or consulting fees incurred in disputes with tenants, and all legal, arbitration and auditing fees other than legal, arbitration and auditing fees reasonably incurred (i) in connection with the maintenance and operation of the Property, or (ii) in connection with the preparation of statements required pursuant to rental escalation or additional rent provisions;

 

(14)                            the cost of performing work or furnishing services to or for any tenant other than Tenant, at Landlord’s expense, to the extent such work or service is in excess of any work or service Landlord is obligated to provide to Tenant or generally to other tenants in the Building at Landlord’s expense;

 

(15)                            costs incurred with respect to a sale of all or any portion of the Building or any interest therein or in connection with the purchase or sale of any air or development rights;

 

(16)                            interest, fines or penalties for late payment by Landlord, if any, except to the extent incurring such expense is a reasonable business expense under the circumstances or caused by a corresponding late payment by Tenant,

 

(17)                            costs to clean-up, contain, abate, remove or otherwise remedy (but not costs to test and monitor) hazardous wastes or asbestos-containing materials from the Building unless the wastes or asbestos-containing materials (A) were introduced to the Building by a Tenant Party or (B) are required to be cleaned-up, contained, abated, removed or otherwise remedied by Laws hereafter enacted or promulgated or the requirement of any insurance carrier or insurance rating organization or underwriting board hereafter enacted or promulgated, whether or not such insurance requirement is mandatory (including the cost of compliance with Laws and insurance requirements enacted or promulgated prior to the date of this Lease if such compliance is required for the first time by reason of any amendment, modification or reinterpretation thereof which is imposed or enacted after the date of this Lease);