To: National Financial Partners Corp. 340 Madison Avenue, 20th Floor New York, New York 10173 A/C 00673131 From: Goldman Sachs Financial Markets, L.P. Subject: Termination of Convertible Bond Hedge Transaction Reference No. SDB1624135469 Date: July 8,...
Exhibit
4.1
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To:
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000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
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A/C
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00673131
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From:
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Xxxxxxx
Xxxxx Financial Markets, L.P.
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Subject:
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Termination
of Convertible Bond Hedge Transaction Reference No.
SDB1624135469
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Date:
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July
8, 2010
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This
letter agreement (this “Termination
Agreement”) relates to the Transaction (the “Transaction”)
entered into between Xxxxxxx Sachs Financial Markets, L.P. (“Dealer”)
and National Financial Partners Corp. (“Counterparty”),
pursuant to a letter agreement dated January 17, 2007 entitled Convertible Bond
Hedge Transaction (Transaction Reference Number: SDB1624135469) (the “Confirmation”). Dealer
is acting as principal and Xxxxxxx, Xxxxx & Co. (“GS&Co.”),
its affiliate, is acting as agent for Dealer and Counterparty for the
Transaction. Dealer
is not a member of the Securities Investor Protection
Corporation. Capitalized terms used herein but not otherwise
defined shall have the meanings assigned to them in the
Confirmation.
On
June 9, 2010, Counterparty commenced a tender offer for any and all of its
$230,000,000 aggregate principal amount of its outstanding 0.75% Convertible
Senior Notes due 2012 (the “Convertible
Notes”) subject to the satisfaction or waiver of certain conditions set
forth in the offer to purchase, dated as of June 9, 2010 (as
subsequently amended, the “Offer
to Purchase”). In connection with the tender offer for the
Convertible Notes, Dealer and Counterparty desire to terminate the Transaction
in its entirety (the “Termination”).
1. Termination. (a)
The parties hereby agree that, in full satisfaction of its obligations in
respect of the Termination, Dealer shall pay to Counterparty on the Payment Date
(as defined below) an amount in USD (the “Termination
Payment”) equal to the Termination Payment Amount (as defined
below).
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Termination Payment
Amount:
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An
amount in USD equal to the product of the Applicable Number of Options and
the Termination Value.
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Applicable Number of
Options:
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All
Options outstanding as of the Settlement Date.
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Settlement
Date:
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Notwithstanding
anything to the contrary in the Confirmation or the Equity Definitions,
the “Settlement Date” (as defined in the Offer to
Purchase).
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Termination
Value:
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An
amount per Option that would be payable by Dealer to Counterparty pursuant
to Section 6 of the Agreement as if Dealer designated an Early Termination
Date in respect of an Additional Termination Event, with Counterparty as
the sole Affected Party and the Transaction as the sole Affected
Transaction, occurring on the Settlement Date. For purposes of
determining such amount, the Dealer shall use the Daily Average Price on
the Valuation Date as the current Share price input.
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Valuation
Date:
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The
Exchange Business Day immediately following the Settlement
Date.
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1
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Daily Average
Price:
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For
any Exchange Business Day, the New York Volume Weighted Average Price per
Share for the regular trading session (including any extensions thereof)
of the Exchange on such Exchange Business Day (without regard to pre-open
or after hours trading outside of such regular trading session), as
published by Bloomberg at 4:15 P.M., New York City time (or 15 minutes
following the end of any extension of the regular trading session), on
such Exchange Business Day, on Bloomberg page “NFP.N<Equity>AQR” (or
any successor thereto) (or if such published volume weighted average price
is unavailable or is manifestly incorrect, the market value of one Share
on such Exchange Business Day, as determined by the Calculation Agent
using a volume weighted method).
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Exchange:
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New
York Stock Exchange
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Consequences of
Disrupted Days:
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Notwithstanding
anything to the contrary in this Termination Agreement or the Equity
Definitions, if the Valuation Date is a Disrupted Day, the Calculation
Agent may, if appropriate in light of market conditions, regulatory
considerations or otherwise, take any or all of the following actions: (i)
postpone the Valuation Date in accordance with Section 6.6 of the Equity
Definitions or (ii) determine that the Valuation Date is a Disrupted Day
only in part, in which case the Calculation Agent shall (A) determine the
Daily Average Price based on transactions in the Shares on such Valuation
Date effected before the relevant Market Disruption Event occurred and/or
after the relevant Market Disruption Event ended, as applicable, and (B)
designate the immediately following Exchange Business Day as the Valuation
Date (with the provisions of this paragraph applying successively to each
such Exchange Business Day so designated) and determine the Termination
Value using an appropriately weighted average of the Daily Average Prices
on the original Valuation Date and such designated Valuation Date or
Dates. Section 6.6(a) of the Equity Definitions is hereby
amended by replacing the word “shall” in the fifth line thereof with the
word “may,” and by deleting clause (ii) thereof. Any Scheduled
Trading Day on which the Exchange is scheduled to close prior to its
normal close of trading shall be deemed a Disrupted Day in
full.
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Market Disruption
Event:
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Section 6.3(a)
of the Equity Definitions is hereby amended by deleting the words “during
the one hour period that ends at the relevant Valuation Time, Latest
Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the
case may be,” in clause (ii) thereof.
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Payment
Date:
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The
date one Settlement Cycle following the Valuation
Date.
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(b) The parties
further agree that, following the Termination Payment, the Transaction shall be
terminated in its entirety and the parties shall be released from any remaining
obligations with respect to the Transaction.
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2. Representations
and Warranties.
(a) Each party
represents to the other party that:
(i) It
is duly organized and validly existing under the laws of the jurisdiction of its
organization or incorporation and, if relevant under such laws, in good
standing.
(ii) It
has the power to execute this Termination Agreement and any other documentation
relating to this Termination Agreement to which it is a party, to deliver this
Termination Agreement and any other documentation relating to this Termination
Agreement that it is required by this Termination Agreement to deliver and to
perform its obligations under this Termination Agreement and has taken all
necessary action to authorize such execution, delivery and
performance.
(iii) Such
execution, delivery and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional documents, any order or
judgment of any court or other agency of government applicable to it or any of
its assets or any contractual restriction binding on or affecting it or any of
its assets.
(iv) All
governmental and other consents that are required to have been obtained by it
with respect to this Termination Agreement have been obtained and are in full
force and effect and all conditions of any such consents have been complied
with.
(v) Its
obligations under this Termination Agreement constitute its legal, valid and
binding obligations, enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors’ rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or at
law)).
(vi) Each
party acknowledges and agrees to be bound by the Conduct Rules of the Financial
Industry Regulatory Authority, Inc. applicable to transactions in options, and
further agrees not to violate the position and exercise limits set forth
therein.
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(b) Counterparty
represents and warrants to and for the benefit of Dealer as
follows:
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(i) On
the date of this Termination Agreement, (A) none of Counterparty and its
officers and directors is aware of any material nonpublic information regarding
Counterparty or the Shares; (B) the Applicable Number of Options does not
constitute material nonpublic information; and (C) all reports and other
documents filed by Counterparty with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) when considered as a whole (with the more recent such reports and
documents deemed to amend inconsistent statements contained in any earlier such
reports and documents), do not contain any untrue statement of a material fact
or any omission of a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances in which they
were made, not misleading.
(ii) Counterparty
acknowledges that neither Dealer nor any of its affiliates is making any
representations or warranties or taking any position or expressing any view with
respect to the treatment of the Transaction under any accounting standards
including ASC Topic 260,
Earnings Per Share, ASC Topic 815,
Derivatives and Hedging, or ASC Topic 480,
Distinguishing Liabilities from Equity and ASC 815-40,
Derivatives and Hedging – Contracts in Entity’s Own Equity (or any
successor issue statements).
(iii) Counterparty
has not received notice that is the subject of a tender offer made under Section
14(d)(1) of the Exchange Act and has not commenced any tender offer that would
be subject to Rule 13e-4 under the Exchange Act, except for the Offer to
Purchase.
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(iv) Counterparty
is not entering into this Termination Agreement to create actual or apparent
trading activity in the Shares (or any security convertible into or exchangeable
for Shares) or to raise or depress or otherwise manipulate the price of the
Shares (or any security convertible into or exchangeable for Shares) or
otherwise in violation of the Exchange Act.
(v) Counterparty
is not, and after giving effect to the transactions contemplated hereby will not
be, required to register as, an “investment company” as such term is defined in
the Investment Company Act of 1940, as amended (the “1940
Act”).
(vi)
On the Settlement Date and Payment Date, Counterparty is not “insolvent” (as
such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11
of the United States Code).
(vii) Counterparty
understands that notwithstanding any other relationship between Counterparty and
Dealer and its affiliates, in connection with this Transaction and any other
over-the-counter derivative transactions between Counterparty and Dealer or its
affiliates, Dealer or its affiliates is acting as principal and is not a
fiduciary or advisor in respect of any such transaction, including any entry,
exercise, amendment, unwind or termination thereof.
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(c) Counterparty
acknowledges that:
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(i) In
connection with the Termination, GS&Co. and its affiliates may buy or sell
Shares or other securities or buy or sell options or futures contracts or enter
into swaps or other derivative securities in order to adjust or unwind its hedge
position with respect to the Transaction.
(ii) GS&Co.
and its affiliates may also be active in the market for the Shares other than in
connection with activities in relation to the Transaction or the
Termination.
(iii) GS&Co.
shall make its own determination as to whether, when or in what manner any
hedging or market activities in Counterparty’s securities shall be conducted and
shall do so in a manner that it deems appropriate to hedge its price and market
risk with respect to the Daily Average Price.
(iv) Any
market activities of GS&Co. and its affiliates with respect to the Shares
may affect the market price and volatility of the Shares, as well as the Daily
Average Price, in a manner that may be adverse to Counterparty.
(v) This
Termination Agreement relates to the termination of the Transaction; GS&Co.
may purchase shares for its own account at an average price that may be greater
than, or less than, the Daily Average Price.
3. Termination
of this Termination Agreement. This Termination Agreement
shall terminate automatically upon the payment of all amounts owing hereunder
following termination of the Offer to Purchase, except that the representations
and warranties set forth above in Section 2 of this Termination Agreement shall
survive the termination of this Termination Agreement without
limitation.
4. No
Netting and Set-off. Each party waives any and all rights it
may have to set-off delivery or payment obligations it owes to the other party
under this Termination Agreement against any delivery or payment obligations
owed to it by the other party, whether arising under the this Termination
Agreement, under any other agreement between parties hereto, by operation of law
or otherwise.
5. Counterparts. This
Termination Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if all of the signatures thereto
and hereto were upon the same instrument.
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6. Additional
Provisions. Counterparty understands and agrees that
GS&Co. will act as agent for both parties with respect to the
Transaction. GS&Co. is so acting solely in its capacity as agent
for Counterparty and Dealer pursuant to instructions from Counterparty and
Dealer. GS&Co. shall have no responsibility or personal liability
to either party arising from any failure by either party to pay or perform any
obligation under any Transaction. Each party agrees to proceed solely
against the other to collect or recover any amount owing to it or enforce any of
its rights in connection with or as a result of any Transaction.
Notwithstanding any
provisions of the Agreement, all communications relating to the Termination
shall be transmitted exclusively through GS&Co. at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 Telephone: (000) 000-0000, Facsimile No. (000)
000-0000.
GS&Co. received other
remuneration from Dealer in relation to this Termination
Agreement. The amount and source of any such other remuneration will
be furnished upon written request. The time of the Termination is
available upon request.
The
parties acknowledge and agree that no collateral shall be posted by either party
hereunder. Notwithstanding the previous sentence, Dealer hereby
notifies Counterparty that, with respect to collateral posted with it,
(i) except as otherwise agreed in writing between Dealer and Counterparty,
Dealer may repledge or otherwise use any collateral delivered to Dealer by
Counterparty in its business; (ii) in the event of Dealer’s failure,
Counterparty will likely be considered an unsecured creditor of Dealer as to all
such collateral then controlled by Dealer; (iii) the Securities Investor
Protection Act of 1970 (15 U.S.C. 78aaa through 78lll) does not protect
Counterparty with respect to any such collateral deposited with Dealer; and
(iv) such collateral will not be subject to the requirements of and
customer protections afforded by the Securities and Exchange Commission customer
protection rules and Rules 8c-1, 15c2-1, 15c3-2 and 15c3-3 under the
Exchange Act.
7. Waiver
of Trial by Jury. EACH OF
COUNTERPARTY AND DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS TERMINATION
AGREEMENT OR THE ACTIONS OF COUNTERPARTY OR ITS AFFILIATES OR DEALER OR ITS
AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT
HEREOF.
8. Governing
Law. All matters arising in connection with this Termination
Agreement shall be governed by, and construed in accordance with, the law of the
State of New York without reference to its choice of laws doctrine.
9. Submission
to Jurisdiction. Each party hereby irrevocably and
unconditionally submits for itself and its property in any legal action or
proceeding by the other party against it relating to this Termination Agreement,
or for recognition and enforcement of any judgment in respect thereof, to the
exclusive jurisdiction of the Supreme Court of the State of New York, sitting in
New York County, the courts of the United States of America for the Southern
District of New York and appellate courts from any thereof.
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Counterparty hereby agrees (a) to check
this Termination Agreement carefully and immediately upon receipt so that errors
or discrepancies can be promptly identified and rectified and (b) confirm that
the foregoing (in the exact form provided by Dealer) correctly sets forth the
terms of the agreement between Dealer and Counterparty with respect to this
Termination Agreement, by manually signing this Termination Agreement or this
page hereof as evidence of agreement to such terms and providing the other
information required herein and immediately returning an executed copy to Equity
Derivatives Document Department, Facsimile No. (000) 000-0000/83.
Yours
faithfully,
XXXXXXX
SACHS FINANCIAL MARKETS, L.P.
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By:
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Xxxxxxx Xxxxx
Financial Markets, LLC,
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general
partner
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By:
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/s/
Xxxxxxx Xxxx
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Name: Xxxxxxx
Xxxx
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Title: Vice
President
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Agreed
and Accepted By:
| By: | /s/ Xxxxx Xxxxx |
| Name: | Xxxxx Xxxxx |
| Title: | EVP and CFO |
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