[Dealer
name and address]
| To: | Progress
Software Corporation |
| | 00
Xxx Xxxx |
| | Bedford,
Massachusetts 01730 |
The
purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the call option
transaction entered into between [___________] (“Dealer”) and Progress Software Corporation (“Counterparty”)
as of the Trade Date specified below (the “Transaction”). This letter agreement constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below. Each party further agrees that this Confirmation together with the
Agreement evidence a complete binding agreement between Counterparty and Dealer as to the subject matter and terms of the Transaction
to which this Confirmation relates, and shall supersede all prior or contemporaneous written or oral communications with respect
thereto.
The
definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”),
as published by the International Swaps and Derivatives Association, Inc. (“ISDA”) are incorporated into this
Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall
govern. Certain defined terms used herein are based on terms that are defined in the Offering Memorandum, dated February 27, 2024
(the “Offering Memorandum”), relating to the 3.50% Convertible Senior Notes due 2030 (as originally issued
by Counterparty, the “Convertible Notes” and each USD 1,000 principal amount of Convertible Notes, a “Convertible
Note”) issued by Counterparty in an aggregate initial principal amount of USD 400,000,000 (as increased by [up to]1
an aggregate principal amount of USD [50,000,000] [if and to the extent that]2[pursuant to the exercise by]3
the Initial Purchasers (as defined herein) [exercise]4[of]5 their
option to purchase additional Convertible Notes pursuant to the Purchase Agreement (as defined herein)), pursuant to an Indenture
to be dated March 1, 2024 between Counterparty and U.S. Bank Trust Company, National Association, as trustee (the “Indenture”).
In the event of any inconsistency between the terms defined in the Offering Memorandum, the Indenture and this Confirmation, this
Confirmation shall govern. The parties acknowledge that this Confirmation is entered into on the date hereof with the understanding
that (i) definitions set forth in the Indenture which are also defined herein by reference to the Indenture and (ii) sections
of the Indenture that are referred to herein will conform to the descriptions thereof in the Offering Memorandum. If any such
definitions in the Indenture or any such sections of the Indenture differ from the descriptions thereof in the Offering Memorandum,
the descriptions thereof in the Offering Memorandum will govern for purposes of this Confirmation. The parties further acknowledge
that the Indenture section numbers used herein are based on the draft of the Indenture last reviewed by Dealer as of the date
of this Confirmation, and if any such section numbers are changed in the Indenture as executed, the parties will amend this Confirmation
in good faith to preserve the intent of the parties. Subject to the foregoing, references to the Indenture herein are references
to the Indenture as in effect on the date of its execution, and if the Indenture is amended or supplemented following such date
(other than any amendment or supplement (x) pursuant to Section [8.01(I)] of the Indenture that, as determined by the Calculation
Agent, conforms the Indenture to the description of Convertible Notes in the Offering Memorandum or (y) pursuant to Section [5.09]
of the Indenture, subject, in the case of this clause (y), to the second paragraph under “Method of Adjustment” in
Section 3), any such amendment or supplement will be disregarded for purposes of this Confirmation (other than as provided in
Section 10(i)(iv) below) unless the parties agree otherwise in writing. For the purposes of the Equity Definitions, the Transaction
shall be deemed to be a Share Option Transaction.
Each
party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in,
substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction
to which this Confirmation relates on the terms and conditions set forth below.
1
Include in the Base Call Option Confirmation.
2
Include in the Base Call Option Confirmation.
3
Include in the Additional Call Option Confirmation.
4
Include in the Base Call Option Confirmation.
5
Include in the Additional Call Option Confirmation.
| 1. | This
Confirmation evidences a complete and binding agreement between Dealer and Counterparty
as to the terms of the Transaction to which this Confirmation relates. This Confirmation
shall supplement, form a part of, and be subject to an agreement in the form of the 2002
ISDA Master Agreement (the “Agreement”) as if Dealer and Counterparty
had executed an agreement in such form on the Trade Date but without any Schedule except
for: |
| (a) | the
election of the laws of the State of New York as the governing law (without reference
to choice of law doctrine) and the election of USD as the Termination Currency; |
| (b) | [(i) the
election of an executed guarantee of [·] (“Guarantor”) dated
as of the Trade Date in substantially the form attached hereto as Schedule 1 as a Credit
Support Document, and (ii) the election of Guarantor as Credit Support Provider in relation
to Dealer;] and |
| (c) | (i)
the election that the “Cross Default” provisions of Section 5(a)(vi) of the
Agreement shall apply to Dealer with a “Threshold Amount” of three percent
of Dealer’s [ultimate parent’s] shareholders’ equity as of the Trade
Date; provided that “Specified Indebtedness” shall not include obligations
in respect of deposits received in the ordinary course of Dealer’s banking business,
(ii) the phrase “or becoming capable at such time of being declared” shall
be deleted from clause (1) of such Section 5(a)(vi) and (iii) the following language
shall be added to the end thereof “Notwithstanding the foregoing, a default under
subsection (2) hereof shall not constitute an Event of Default if (x) the default was
caused solely by error or omission of an administrative or operational nature; (y) funds
were available to enable the party to make the payment when due; and (z) the payment
is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.” |
In
the event of any inconsistency between provisions of the Agreement and this Confirmation, this Confirmation will prevail for the
purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no transaction other than the Transaction
to which this Confirmation relates shall be governed by the Agreement. If there exists any ISDA Master Agreement between Dealer
and Counterparty or any confirmation or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement
is deemed to exist between Dealer and Counterparty, then notwithstanding anything to the contrary in such ISDA Master Agreement,
such confirmation or agreement or any other agreement to which Dealer and Counterparty are parties, the Transaction shall not
be considered a Transaction under, or otherwise governed by, such existing or deemed ISDA Master Agreement.
| 2. | The
terms of the particular Transaction to which this Confirmation relates are as follows: |
General
Terms.
| |
Trade Date: |
[·], 2024 |
| |
|
|
| |
Effective Date: |
The Trade Date, subject to Section 10(w) below |
| |
|
|
| |
Option Style: |
“Modified American”, as described under “Procedures
for Exercise” below |
| |
|
|
| |
Option Type: |
Call |
| |
|
|
| |
Buyer: |
Counterparty |
| |
|
|
| |
Seller: |
Dealer |
| |
|
|
| |
Shares: |
The common stock of Counterparty, par value USD 0.01 per share
(Exchange symbol: “PRGS”). |
| |
Number of Options: |
[400,000][50,000].6 For the avoidance of doubt, the
Number of Options shall be reduced by any Options exercised by Counterparty. In no event will the Number of Options be less
than zero. |
| |
|
|
| |
Applicable Percentage: |
[__]% |
| |
|
|
| |
Option Entitlement: |
A number equal to the product of the Applicable Percentage and
[______]7 |
| |
|
|
| |
Strike Price: |
USD [______] |
| |
|
|
| |
Cap Price: |
USD [______] |
| |
|
|
| |
Premium: |
USD [______] |
| |
|
|
| |
Premium Payment Date: |
[____], 2024 |
| |
|
|
| |
Exchange: |
The Nasdaq Global Select Market |
| |
|
|
| |
Related Exchange(s): |
All Exchanges |
| |
|
|
| |
Excluded Provisions: |
Section [5.06] and Section [5.07] of the Indenture. |
| |
|
|
| Procedures for Exercise. |
|
| |
|
|
| |
Conversion Date: |
With respect to any conversion of a Convertible Note (other than
any conversion of Convertible Notes with a Conversion Date occurring prior to the Free Convertibility Date (any such conversion,
an “Early Conversion”), to which the provisions of 10(i)(i) of this Confirmation shall apply), the date
on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements
for conversion thereof as set forth in Section [5.02] of the Indenture; provided that if Counterparty has not delivered
to Dealer a related Notice of Exercise, then in no event shall a Conversion Date be deemed to occur hereunder (and no Option
shall be exercised or deemed to be exercised hereunder) with respect to any surrender of a Convertible Note for conversion
in respect of which Counterparty has elected to designate a financial institution for exchange in lieu of conversion of such
Convertible Note pursuant to Section [5.08] of the Indenture. |
| |
|
|
| |
Free Convertibility Date: |
November 1, 2029 |
| |
|
|
| |
Expiration Time: |
The Valuation Time |
| |
|
|
| |
Expiration Date: |
March 1, 2030, subject to earlier exercise. |
| |
|
|
| |
Multiple Exercise: |
Applicable, as described under “Automatic Exercise upon Conversion”
and “Automatic Exercise of Remaining Repurchase Options After Free Convertibility Date” below. |
6
For the Base Call Option Confirmation, this is equal to the number of Convertible Notes in principal amount of $1,000 initially
issued on the closing date for the Convertible Notes. For the Additional Call Option Confirmation, this is equal to the number
of additional Convertible Notes in principal amount of $1,000.
7
Insert the initial Conversion Rate for the Convertible Notes.
| |
Automatic
Exercise: |
Notwithstanding
Section 3.4 of the Equity Definitions, on each Conversion Date occurring on or after the Free Convertibility Date in respect
of which a Notice of Conversion that is effective as to Counterparty has been delivered by the relevant converting Holder,
a number of Options equal to [(x)] the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion
Date has occurred [minus (y) the number of Options that are or are deemed to be automatically exercised on such Conversion
Date under the Base Call Option Transaction Confirmation letter agreement dated [·], 2024 between Dealer and Counterparty
(the “Base Call Option Confirmation”),]8 shall be deemed to be automatically exercised; provided
that such Options shall be exercised or deemed exercised only if Counterparty has provided a Notice of Exercise to Dealer
in accordance with “Notice of Exercise” below. |
| |
|
|
| |
|
Notwithstanding the
foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options. |
| |
|
|
| |
Automatic
Exercise of Remaining Repurchase Options After
Free
Convertibility Date: |
Notwithstanding
anything herein or in Section 3.4 of the Equity Definitions to the contrary, unless Counterparty notifies Dealer in writing prior
to 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the Expiration Date that it does not wish automatic
exercise to occur with respect to any Remaining Repurchase Options (as defined below), a number of Options equal to the lesser
of (a) the Number of Options (after giving effect to the provisions opposite the caption “Automatic Exercise” above)
as of 9:00 a.m. (New York City time) on the Expiration Date and (b) the Remaining Repurchase Options [minus the number
of Remaining Options (as defined in the Base Call Option Confirmation)]9 (such lesser number, the “Remaining
Options”) will be deemed to be automatically exercised as if (i) a number of Convertible Notes (in denominations of
USD 1,000 principal amount) equal to such number of Remaining Options were outstanding under the Indenture and were converted
with a “Conversion Date” (as such term is defined in the Indenture) occurring on or after the Free Convertibility
Date and (ii) the Settlement Method applied to such Convertible Notes; provided that no such automatic exercise pursuant
to this paragraph will occur if the Relevant Price for each Valid Day during the Settlement Averaging Period is less than or equal
to the Strike Price. “Remaining Repurchase Options” shall mean the excess of (I) the aggregate number of Convertible
Notes (in denominations of USD 1,000 principal amount) that were subject to Repayment Events (as defined below) of the type described
in clause (y) of Section 10(i)(iii) (“Repurchase Events”) during the term of the Transaction over (II)
the aggregate number of Repayment Options (as defined below) that were terminated hereunder relating to Repurchase Events during
the term of the Transaction (“Repurchase Event Options”) [plus the aggregate number of Repurchase Event
Options (as defined in the Base Call Option Confirmation) terminated under the Base Call Option Confirmation]10. Counterparty
shall notify Dealer in writing of the number of Remaining Repurchase Options before 5:00 p.m. (New York City time) on the Scheduled
Valid Day immediately preceding the Expiration Date.
|
8
Include for Additional Call Option Confirmation only.
9
Include for Additional Call Option Confirmation only.
10
Include for Additional Call Option Confirmation only.
| |
Notice
of Exercise: |
Notwithstanding
anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, but subject to “Automatic
Exercise of Remaining Repurchase Options After Free Convertibility Date”, in order to exercise any Options relating
to Convertible Notes with a Conversion Date occurring on or after the Free Convertibility Date, Counterparty must notify Dealer
in writing (which, for the avoidance of doubt, may be by email) before 5:00 p.m. (New York City time) on the Scheduled Valid
Day immediately preceding the Expiration Date specifying the number of such Options; provided that if the Relevant
Settlement Method for such Options is (x) Net Share Settlement and the Specified Cash Amount (as defined below) is not USD
1,000, (y) Cash Settlement or (z) Combination Settlement, Counterparty shall provide Dealer a separate notice (the “Notice
of Final Settlement Method”) (which, for the avoidance of doubt, may be by email) in respect of all such Convertible
Notes before 5:00 p.m. (New York City time) on the Free Convertibility Date specifying (1) the Relevant Settlement Method
for such Options, and (2) if the settlement method for the related Convertible Notes is not Settlement in Cash (as defined
below), the fixed amount of cash per Convertible Note that Counterparty has elected to deliver to Holders (as such term is
defined in the Indenture) of the related Convertible Notes (the “Specified Cash Amount”) and if Counterparty
fails to timely provide such Notice of Final Settlement Method, it shall be deemed to have provided a Notice of Final Settlement
Method indicating that the Relevant Settlement Method is Net Share Settlement and that the settlement method for the related
Convertible Notes is a combination of cash and shares with a Specified Cash Amount of USD 1,000. Counterparty acknowledges
its responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act (as
defined below) and the rules and regulations thereunder, in respect of any election of a settlement method with respect to
the Convertible Notes that is not Net Share Settlement with a Specified Cash Amount of USD 1,000 that applies pursuant to
Section [5.03(A)] of the Indenture. |
| | Valuation
Time: | At
the close of trading of the regular trading session on the Exchange; provided
that if the principal trading session is extended, the Calculation Agent shall determine
the Valuation Time in its commercially reasonable discretion. |
| | | |
| | Market
Disruption Event: | Section
6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following: |
| | | |
| | “‘Market
Disruption Event’ means, in respect of a Share, (i) a failure by the primary United
States national or regional securities exchange or market on which the Shares are then
listed, or if the Shares are not then listed on a United States national or regional
securities exchange, the principal other market on which the Shares are then traded,
to open for trading during its regular trading session or (ii) the occurrence or existence,
for more than one half-hour period in the aggregate, of any suspension or limitation
imposed on trading (by reason of movements in price exceeding limits permitted by the
relevant stock exchange or otherwise) in the Shares or in any options contracts or futures
contracts relating to the Shares, and such suspension or limitation occurs or exists
at any time before 1:00 p.m. (New York City time) on any Scheduled Valid Day.” |
| | | |
| Settlement Terms. | |
| | | |
| | Settlement
Method: | For
any Option, Net Share Settlement; provided that if the Relevant Settlement Method
set forth below for such Option is not Net Share Settlement, then the Settlement Method
for such Option shall be such Relevant Settlement Method, but only if Counterparty shall
have notified Dealer of the Relevant Settlement Method in the Notice of Final Settlement
Method for such Option. |
| | | |
| | Relevant
Settlement Method: | In
respect of any Option: |
| | | |
| | | (i) if
Counterparty has elected to settle its conversion obligations in respect of the related
Convertible Note in a combination of cash and Shares pursuant to Section [5.03(B)(i)(2)]
of the Indenture with a Specified Cash Amount equal to USD 1,000, then, in each
case, the Relevant Settlement Method for such Option shall be Net Share Settlement; |
| | | |
| | | (ii) if
Counterparty has elected to settle its conversion obligations in respect of the related
Convertible Note in a combination of cash and Shares pursuant to Section [5.03(B)(i)(2)]
of the Indenture with a Specified Cash Amount greater than USD 1,000, then the Relevant
Settlement Method for such Option shall be Combination Settlement; and |
| | | |
| | | (iii) if
Counterparty has elected to settle its conversion obligations in respect of the related
Convertible Note entirely in cash pursuant to Section [5.03(B)(i)(1)] of the Indenture
(such settlement method, “Settlement in Cash”), then the Relevant
Settlement Method for such Option shall be Cash Settlement. |
| | Net
Share Settlement: | If
Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder,
Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option,
a number of Shares (the “Net Share Settlement Amount”) equal to the
sum, for each Valid Day during the Settlement Averaging Period for each such Option,
of (i) (a) the Daily Option Value for such Valid Day, divided by (b) the
Relevant Price on such Valid Day, divided by (ii) the number of Valid Days in
the Settlement Averaging Period; provided that in no event shall the Net Share
Settlement Amount for any Option that is not a Repurchase Event Option exceed a number
of Shares equal to the Applicable Limit for such Option divided by the Applicable
Limit Price on the Settlement Date for such Option. |
| | | |
| | Dealer
will pay cash in lieu of delivering any fractional Shares to be delivered with respect
to any Net Share Settlement Amount valued at the Relevant Price for the last Valid Day
of the Settlement Averaging Period. |
| | | |
| | Combination
Settlement: | If
Combination Settlement is applicable to any Option exercised or deemed exercised hereunder,
Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant Settlement
Date for each such Option: |
| (i) | cash
(the “Combination Settlement Cash Amount”) equal to the sum, for each
Valid Day during the Settlement Averaging Period for such Option, of (A) an amount (the
“Daily Combination Settlement Cash Amount”) equal to the lesser of
(1) the product of (x) the Applicable Percentage and (y) the Specified Cash Amount minus
USD 1,000 and (2) the Daily Option Value, divided by (B) the number of Valid
Days in the Settlement Averaging Period; provided that if the calculation in clause
(A) above results in zero or a negative number for any Valid Day, the Daily Combination
Settlement Cash Amount for such Valid Day shall be deemed to be zero; and |
| (ii) | Shares
(the “Combination Settlement Share Amount”) equal to the sum, for
each Valid Day during the Settlement Averaging Period for such Option, of a number of
Shares for such Valid Day (the “Daily Combination Settlement Share Amount”)
equal to (A) (1) the Daily Option Value on such Valid Day minus the Daily
Combination Settlement Cash Amount for such Valid Day, divided by (2) the Relevant
Price on such Valid Day, divided by (B) the number of Valid Days in the Settlement
Averaging Period; provided that if the calculation in sub-clause (A)(1) above
results in zero or a negative number for any Valid Day, the Daily Combination Settlement
Share Amount for such Valid Day shall be deemed to be zero; provided that in no
event shall the sum of (x) the Combination Settlement Cash Amount for any Option that
is not a Repurchase Event Option and (y) the Combination Settlement Share Amount for
such Option multiplied by the Applicable Limit Price on the Settlement Date for
such Option, exceed the Applicable Limit for such Option. |
| | Dealer
will pay cash in lieu of delivering any fractional Shares to be delivered with respect
to any Combination Settlement Share Amount valued at the Relevant Price for the last
Valid Day of the Settlement Averaging Period. |
| | | |
| | Cash
Settlement: | If
Cash Settlement is applicable to any Option exercised or deemed exercised hereunder,
in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on
the relevant Settlement Date for each such Option, an amount of cash (the “Cash
Settlement Amount”) equal to the sum, for each Valid Day during the Settlement
Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided
by (ii) the number of Valid Days in the Settlement Averaging Period; provided
that in no event shall the Cash Settlement Amount for any Option that is not a Repurchase
Event Option exceed the Applicable Limit for such Option. |
| | | |
| | Daily
Option Value: | For
any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied
by (ii) (A) the lesser of the Relevant Price on such Valid Day and the Cap Price,
less (B) the Strike Price on such Valid Day; provided that if the calculation
contained in clause (ii) above results in a negative number, the Daily Option Value for
such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be
less than zero. |
| | | |
| | Applicable
Limit: | For
any Option that is not a Repurchase Event Option, an amount of cash equal to the Applicable
Percentage multiplied by the excess of (i) the aggregate of (A) the amount of
cash, if any, paid to the Holder of the related Convertible Note upon conversion of such
Convertible Note and (B) the number of Shares, if any, delivered to the Holder of the
related Convertible Note upon conversion of such Convertible Note multiplied by
the Applicable Limit Price on the Settlement Date for such Option, over (ii) USD 1,000. |
| | | |
| | Applicable
Limit Price: | On
any day, the opening price as displayed under the heading “Op” on Bloomberg
page PRGS <equity> (or any successor thereto). |
| | | |
| | Valid
Day: | A
day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally
occurs on the principal United States national or regional securities exchange on which
the Shares are then listed or, if the Shares are not then listed on a United States national
or regional securities exchange, on the principal other market on which the Shares are
then traded. If the Shares are not so listed or traded, “Valid Day” means
a Business Day. |
| |
Scheduled Valid Day: |
A day that is scheduled to be a Valid Day on the principal United
States national or regional securities exchange on which the Shares are listed or, if the Shares are not then listed on a
United States national or regional securities exchange, on the principal other market on which the Shares are then traded.
If the Shares are not so listed or traded, “Scheduled Valid Day” means a Business Day. |
| |
|
|
| |
Business Day: |
Any day other than a Saturday, a Sunday or a day on which the Federal
Reserve Bank of New York is authorized or required by law or executive order to close or be closed. |
| |
|
|
| |
Relevant Price: |
On any Valid Day, the per Share volume-weighted average price of
the Shares as displayed under the heading “Bloomberg VWAP” on Bloomberg page PRGS <equity> AQR (or, if such
page is not available, its equivalent successor page) in respect of the period from the scheduled open of trading to the scheduled
close of trading of the primary trading session on such Valid Day (or if such volume-weighted average price is unavailable,
the market value of one Share on such Valid Day, as determined by the Calculation Agent in a commercially reasonable manner
using, if practicable, a volume-weighted average method). The Relevant Price will be determined without regard to after-hours
trading or any other trading outside of the regular trading session. |
| |
|
|
| |
Settlement Averaging Period: |
For any Option, the 60 consecutive Valid Days commencing on, and
including, the 61st Scheduled Valid Day immediately prior to the Expiration Date. |
| |
|
|
| |
Settlement Date: |
For any Option, the second Business Day immediately following the
final Valid Day of the Settlement Averaging Period for such Option. |
| |
|
|
| |
Settlement Currency: |
USD |
| |
|
|
| |
Other Applicable Provisions: |
The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 of the Equity
Definitions will be applicable, except that all references in such provisions to “Physically-settled” shall be
read as references to “Share Settled”. “Share Settled” in relation to any Option means that Net Share
Settlement or Combination Settlement is applicable to that Option. |
| |
|
|
| |
Representation and Agreement: |
Notwithstanding anything to the contrary in the Equity Definitions
(including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty
shall be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the
Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated
form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be “restricted
securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)). |
| 3. | Additional
Terms applicable to the Transaction. |
| | |
| | Adjustments
applicable to the Transaction: |
| |
Potential Adjustment Events: |
Notwithstanding Section 11.2(e) of the Equity Definitions (which
Section shall not apply for purposes of the Transaction, except as provided in Section 10(y) below), a “Potential Adjustment
Event” means an occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would
result in an adjustment under the Indenture to the “Conversion Rate” or the composition of a [“Reference
Property Unit” or to any “Last Reported Sale Price”, “Daily VWAP,” “Daily Conversion Value,”
“Daily Share Amount” or “Daily Cash Amount”] (each as defined in the Indenture). For the avoidance
of doubt, Dealer shall not have any delivery or payment obligation hereunder, and no adjustment shall be made to the terms
of the Transaction, on account of (x) any distribution of cash, property or securities by Counterparty to holders of
the Convertible Notes (upon conversion or otherwise) or (y) any other transaction in which holders of the Convertible
Notes are entitled to participate, in each case, in lieu of an adjustment under the Indenture of the type referred to in the
immediately preceding sentence (including, without limitation, pursuant to [the proviso to the first sentence of Section [5.05(A)(iii)(1)]
of the Indenture] or [the proviso to the first sentence of Section [5.05(A)(iv)] of the Indenture]). |
| |
|
|
| |
Method of Adjustment: |
Calculation Agent Adjustment, which means that, notwithstanding
Section 11.2(c) of the Equity Definitions (which Section shall not apply for purposes of the Transaction, except as provided
in Section 10(y) below), upon any Potential Adjustment Event, the Calculation Agent shall make a commercially reasonable
adjustment to any one or more of the Strike Price, the Option Entitlement, the Relevant Price and/or other applicable price
with respect to the Shares and the composition of the “Shares” hereunder, in each case, corresponding to the applicable
adjustment required to be made pursuant to the Indenture. |
| |
|
|
| |
|
Notwithstanding the foregoing and “Consequences of Merger
Events / Tender Offers” below: |
| (i) | if
the Calculation Agent in good faith disagrees with any adjustment to the Convertible
Notes that involves an exercise of discretion by Counterparty or its board of directors
(including, without limitation, pursuant to Section [5.05(H)] of the Indenture, Section
[5.09] of the Indenture or any supplemental indenture entered into thereunder or in connection
with any proportional adjustment or the determination of the fair value of any securities,
property, rights or other assets), then in each such case, the Calculation Agent will
determine in good faith and in a commercially reasonable manner the adjustment to be
made to any one or more of the Strike Price, Number of Options, Option Entitlement and
any other variable relevant to the exercise, settlement or payment for the Transaction
in a commercially reasonable manner; provided that, notwithstanding the foregoing,
if any Potential Adjustment Event occurs during the Settlement Averaging Period but no
adjustment was made to any Convertible Note under the Indenture because the relevant
Holder (as such term is defined in the Indenture) was deemed to be a record owner of
the underlying Shares on the related Conversion Date, then the Calculation Agent shall
make a commercially reasonable adjustment, as determined by it, to the terms hereof in
order to account for such Potential Adjustment Event; |
| | | |
| (ii) | in
connection with any Potential Adjustment Event as a result of an event or condition set
forth in Section [5.05(A)(ii)] of the Indenture or Section [5.05(A)(iii)] of the Indenture
where, in either case, the period for determining “Y” (as such term is used
in Section [5.05(A)(ii)] of the Indenture) or “SP” (as such term is used
in Section [5.05(A)(iii)] of the Indenture), as the case may be, begins before Counterparty
has publicly announced the event or condition giving rise to such Potential Adjustment
Event, then the Calculation Agent shall, in good faith and in a commercially reasonable
manner, have the right to adjust any variable relevant to the exercise, settlement or
payment for the Transaction as appropriate to reflect the commercially reasonable costs
(including, but not limited to, hedging mismatches and market losses) and expenses incurred
by Dealer in connection with its hedging activities, with such adjustments made assuming
that Dealer maintains commercially reasonable hedge positions, as a result of such event
or condition not having been publicly announced prior to the beginning of such period;
and |
| | | |
| (iii) | if
any Potential Adjustment Event is declared and (a) the event or condition giving rise
to such Potential Adjustment Event is subsequently amended, modified, cancelled or abandoned,
(b) the “Conversion Rate” (as defined in the Indenture) is otherwise
not adjusted at the time or in the manner contemplated by the relevant Dilution Adjustment
Provision based on such declaration or (c) the “Conversion Rate” (as defined
in the Indenture) is adjusted as a result of such Potential Adjustment Event and subsequently
re-adjusted (each of clauses (a), (b) and (c), a “Potential Adjustment Event
Change”) then, in each case, the Calculation Agent shall, in good faith and
in a commercially reasonable manner, have the right to adjust any variable relevant to
the exercise, settlement or payment for the Transaction as appropriate to reflect the
costs (including, but not limited to, for hedging mismatches and market losses) and expenses
incurred by Dealer in connection with its hedging activities, with such adjustments made
assuming that Dealer maintains commercially reasonable hedge positions, as a result of
such Potential Adjustment Event Change. |
| |
Dilution Adjustment Provisions: |
Sections [5.05(A)][(i), (ii), (iii), (iv) and (v)] and Section
[5.05(H)] of the Indenture. |
| |
|
|
| |
Extraordinary Events applicable to the Transaction: |
| |
|
|
| |
Merger Events: |
Applicable; provided that notwithstanding Section 12.1(b)
of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth [in the definition
of “Common Stock Change Event”] in Section [5.09(A)] of the Indenture. |
| |
|
|
| |
Tender Offers: |
Applicable; provided that notwithstanding Section 12.1(d)
of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section
[5.05(A)(v)] of the Indenture. |
| |
|
|
| |
Consequences of Merger Events / Tender Offers: |
Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions
(which Section shall not apply for purposes of the Transaction except as provided in Section 10(y) below), upon the occurrence
of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment
under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of
Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction, subject
to the second paragraph under “Method of Adjustment”; provided, however, that such adjustment shall
be made without regard to any adjustment to the “Conversion Rate” (as defined in the Indenture) pursuant to any
Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration
for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a
corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii)
the Counterparty to the Transaction following such Merger Event or Tender Offer will not be a corporation organized under
the laws of the United States, any State thereof or the District of Columbia, then, in either case, Cancellation and Payment
(Calculation Agent Determination) may apply at Dealer’s reasonable election; provided further that, for the avoidance
of doubt, adjustments shall be made pursuant to the provisions set forth above regardless of whether any Merger Event or Tender
Offer gives rise to an Early Conversion. |
| |
Consequences of Announcement Events: |
Modified Calculation Agent Adjustment as set forth in Section 12.3(d)
of the Equity Definitions; provided that, in respect of an Announcement Event, (w) references to “Tender Offer”
shall be replaced by references to “Announcement Event” and references to “Tender Offer Date” shall
be replaced by references to “date of such Announcement Event”, (x) the word “shall” in the second
line shall be replaced with “may (and, if it would be commercially reasonable to do so, shall)”, (y) the phrase
“exercise, settlement, payment or any other terms of the Transaction (including, without limitation, the spread)”
shall be replaced with the phrase “Cap Price (provided that in no event shall the Cap Price be less than the Strike
Price)” and the words “whether within a commercially reasonable (as determined by the Calculation Agent) period
of time prior to or after the Announcement Event” shall be inserted prior to the word “which” in the seventh
line, and (z) for the avoidance of doubt, the Calculation Agent shall determine, in good faith and in a commercially reasonable
manner, whether the relevant Announcement Event has had a material economic effect on the Transaction (and, if so, shall adjust
the Cap Price accordingly to account for such economic effect in a commercially reasonable manner) on one or more occasions
on or after the date of the Announcement Event up to, and including, the Expiration Date, any Early Termination Date and/or
any other date of cancellation, it being understood that any adjustment in respect of an Announcement Event shall take into
account any earlier adjustment relating to the same Announcement Event and shall not be duplicative with any other adjustment
or cancellation valuation made pursuant to this Confirmation, the Equity Definitions or the Agreement; provided that
in no event shall the Cap Price be adjusted to be less than the Strike Price (subject in all cases to clause (ii) of Section
12.3(d) of the Equity Definitions). In making any adjustment the Calculation Agent shall take into account stock price, volatility,
expected dividends, stock loan rate, liquidity relevant to the Shares or to the Transaction, and other commercially reasonable
option pricing inputs that the Calculation Agent determines in a commercially reasonable manner to be relevant, whether within
a commercially reasonable (as determined by the Calculation Agent) period of time prior to or after such Announcement Event.
An Announcement Event shall be an “Extraordinary Event” for purposes of the Equity Definitions, to which Article
12 of the Equity Definitions is applicable. |
| |
Announcement Event: |
(w) An Announcement Date occurs in respect of a potential Merger
Event (for the avoidance of doubt, determined without regard to the language in the definition of “Merger Event”
following the definition of “Reverse Merger” therein) or Tender Offer or any transaction or event or series of
transactions and/or events that, if consummated, would lead to a Merger Event or Tender Offer (as determined by the Calculation
Agent), (x) Counterparty, a subsidiary, affiliate, agent or representative of Counterparty makes a public announcement of
an intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include
a Merger Event, Tender Offer or an Acquisition Transaction, (y) there occurs a public announcement by (1) any Valid Third-Party
Entity in respect of the relevant transaction, (2) Counterparty or (3) any subsidiary, affiliate, agent or representative
of Counterparty, in each case, of any potential acquisition or disposition by Counterparty and/or its subsidiaries where the
aggregate consideration exceeds 35% of the market capitalization of Counterparty as of the date of such announcement (an “Acquisition
Transaction”) or (z) there occurs any subsequent public announcement of a change to a transaction or intention that
is the subject of an announcement of the type described in clause (w), (x) or (y) of this sentence (including, without limitation,
a new announcement, whether or not by the same party, relating to such a transaction or intention or the announcement of a
withdrawal from, or the abandonment or discontinuation of, such a transaction or intention) (in each case, whether such announcement
(and only if such announcement) is made by Counterparty, its subsidiary, affiliate, agent or representative, or a Valid Third-Party
Entity) (any event described in clause (w), (x), (y) or (z), an “Announcement Event”) as determined by
the Calculation Agent. For the avoidance of doubt, the occurrence of an Announcement Event with respect to any transaction
or intention shall not preclude the occurrence of a later Announcement Event with respect to such transaction or intention.
For purposes of this definition of “Announcement Event,” (A) “Merger Event” shall mean such term as
defined under Section 12.1(b) of the Equity Definitions (but, for the avoidance of doubt, the remainder of the definition
of “Merger Event” in Section 12.1(b) of the Equity Definitions following the definition of “Reverse Merger”
therein shall be disregarded) and (B) “Tender Offer” shall mean such term as defined under Section 12.1(d) of
the Equity Definitions; provided that (1) Section 12.1(d) of the Equity Definitions is hereby amended by (x) replacing
“10%” with “20%” in the third line thereof and (y) replacing the words “voting shares of the
Issuer” in the fourth line thereof with the word “Shares” and (2) Section 12.1(e) of the Equity Definitions
is hereby amended by replacing the words “voting shares” in the first line thereof with the word “Shares”. |
| |
Valid Third-Party Entity: |
In respect of any potential transaction, any third party that the
Calculation Agent determines has a bona fide intent to enter into or consummate such transaction (it being understood and
agreed that in determining whether such third party has such a bona fide intent, the Calculation Agent may take into consideration
the effect of the relevant announcement by such third party on the Shares and/or options relating to the Shares). |
| |
|
|
| |
Announcement Date: |
The definition of “Announcement Date” in Section 12.1
of the Equity Definitions is hereby amended by (i) replacing the words “the first” with “any” and
replacing the words “a firm” with the word “any” in the second and fourth lines thereof, (ii) replacing
the word “leads to the” with the words “, if completed, would lead to a” in the third and the fifth
lines thereof, (iii) replacing the words “voting shares” with the word “Shares” in the fifth line
thereof, (iv) inserting the words “by Counterparty, a subsidiary, affiliate, agent or representative of Counterparty,
or any Valid Third-Party Entity” after the word “announcement” in the second and the fourth lines thereof
and (v) inserting the word “potential” following the words “in the case of a” at the beginning of
clauses (i) and (ii) therein. |
| |
|
|
| |
Nationalization, Insolvency or Delisting: |
Cancellation and Payment (Calculation Agent Determination); provided
that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting
if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any
of the New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or their respective successors);
if the Shares are immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The Nasdaq Global Select
Market or The Nasdaq Global Market (or their respective successors), such exchange or quotation system shall thereafter be
deemed to be the Exchange. |
| |
|
|
| |
Additional Disruption Events: |
|
| |
|
|
| |
Change in Law: |
Applicable; provided that Section 12.9(a)(ii) of the Equity
Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with
the phrase “, or public announcement of, the formal or informal interpretation”, (ii) replacing the word “Shares”
where it appears in clause (X) thereof with the words “Hedge Position”, (iii) replacing the parenthetical beginning
after the word “regulation” in the second line thereof the words “(including, for the avoidance of doubt
and without limitation, (x) any tax law or (y) adoption, effectiveness or promulgation of new regulations authorized or mandated
by existing statute)” and (iv) adding the words “provided that, in the case of clause (Y) hereof where such determination
is based on Dealer’s policies and procedures, such policies and procedures have been adopted by Dealer in good faith
and are generally applicable in similar situations and applied in a non-discriminatory manner;” after the semi-colon
in the last line thereof. |
| |
Failure to Deliver: |
Applicable |
| |
|
|
| |
Hedging Disruption: |
Applicable; provided that: |
| (i) | Section
12.9(a)(v) of the Equity Definitions is hereby amended by (a) inserting the following
words at the end of clause (A) thereof: “in the manner contemplated by the Hedging
Party on the Trade Date” and (b) inserting the following two phrases at the end
of such Section: |
| | | |
| | “For
the avoidance of doubt, the term “equity price risk” shall be deemed to include,
but shall not be limited to, stock price and volatility risk. And, for the further avoidance
of doubt, any such transactions or assets referred to in phrases (A) or (B) above must
be available on commercially reasonable pricing terms.”; and |
| | | |
| (ii) | Section
12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line
thereof, after the words “to terminate the Transaction”, the words “or
a portion of the Transaction affected by such Hedging Disruption”. |
| |
|
|
| |
Increased Cost of Hedging: |
Not Applicable |
| |
|
|
| |
Hedging Party: |
For all applicable Additional Disruption Events, Dealer. |
| |
|
|
| |
|
Following any determination or calculation by Hedging Party hereunder,
upon a written request by Counterparty (which may be by email), Hedging Party will promptly (but in any event within five
Exchange Business Days) provide to Counterparty by email to the email address provided by Counterparty in such written request
a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail
the basis for such determination or calculation (including any quotations, market data or information from internal or external
sources, and any assumptions used in making such determination or calculation), it being understood that in no event will
Hedging Party be obligated to share with Counterparty any proprietary or confidential data or information or any proprietary
or confidential models used by it in making such determination or calculation or any information that is subject to an obligation
not to disclose such information. |
| |
|
|
| |
Determining Party: |
For all applicable Extraordinary Events, Dealer; provided
that when making any determination or calculation as “Determining Party,” Dealer shall be bound by the same obligations
relating to required acts of the Calculation Agent as set forth in Section 1.40 of the Equity Definitions and this Confirmation
as if Determining Party were the Calculation Agent. |
| | Following
any determination or calculation by Determining Party hereunder, upon a written request
by Counterparty (which may be by email), Determining Party will promptly (but in any
event within five Exchange Business Days) provide to Counterparty by email to the email
address provided by Counterparty in such written request a report (in a commonly used
file format for the storage and manipulation of financial data) displaying in reasonable
detail the basis for such determination or calculation (including any quotations, market
data or information from internal or external sources, and any assumptions used in making
such determination or calculation), it being understood that in no event will Determining
Party be obligated to share with Counterparty any proprietary or confidential data or
information or any proprietary or confidential models used by it in making such determination
or calculation or any information that is subject to an obligation not to disclose such
information. |
| Non-Reliance: | Applicable |
| | | |
| | Agreements
and Acknowledgments Regarding Hedging Activities: | Applicable |
| | | |
| | Additional
Acknowledgments: | Applicable |
| | | |
| 4. | Calculation
Agent. | Dealer;
provided that, following the occurrence and during the continuance of an Event
of Default of the type described in Section 5(a)(vii) of the Agreement with respect to
which Dealer is the sole Defaulting Party, if the Calculation Agent fails to timely make
any calculation, adjustment or determination required to be made by the Calculation Agent
hereunder or to perform any obligation of the Calculation Agent hereunder and such failure
continues for two Exchange Business Days following notice to the Calculation Agent by
Counterparty of such failure, Counterparty shall have the right to designate a nationally
recognized independent equity derivatives dealer to replace Dealer as the Calculation
Agent, and the parties shall work in good faith to execute any appropriate documentation
required by such replacement Calculation Agent. |
| | | |
| | | Following
any adjustment, determination or calculation by the Calculation Agent hereunder, upon
a written request by Counterparty (which may be by email), the Calculation Agent will
promptly (but in any event within five Exchange Business Days) provide to Counterparty
by email to the email address provided by Counterparty in such written request a report
(in a commonly used file format for the storage and manipulation of financial data) displaying
in reasonable detail the basis for such adjustment, determination or calculation (including
any quotations, market data or information from internal or external sources, and any
assumptions used in making such adjustment, determination or calculation), it being understood
that in no event will the Calculation Agent be obligated to share with Counterparty any
proprietary or confidential data or information or any proprietary or confidential models
used by it in making such adjustment, determination or calculation or any information
that is subject to an obligation not to disclose such information.
All
calculations and determinations by the Calculation Agent shall be made in good faith and in a commercially reasonable manner.
|
| (a) | Account
for payments to Counterparty: |
To
be provided by Counterparty.
Account
for delivery of Shares to Counterparty:
To
be provided by Counterparty.
| (b) | Account for payments to Dealer: |
| | | |
|
| | | Bank: |
[____________] |
| | | ABA#:
|
[____________] |
| | | Acct
No.: |
[____________] |
| | | Beneficiary: |
[____________] |
| | | Ref: |
[____________] |
Account
for delivery of Shares from Dealer:
To
be provided by Dealer
| (a) | The
Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch
Party. |
| (b) | The
Office of Dealer for the Transaction is: [____________] |
[Dealer’s
Office Address]
| (a) | Address
for notices or communications to Counterparty: |
| To: | Progress
Software Corporation |
| | Bedford,
Massachusetts 01730 |
| |
Attention: |
[·] |
| |
Telephone No.: |
[·] |
| |
Email: |
[·] |
| (b) | Address
for notices or communications to Dealer: |
[____________]
| 8. | Representations
and Warranties of Counterparty. |
Each
of the representations and warranties of Counterparty set forth in Section 1 of the Purchase Agreement (the “Purchase
Agreement”) dated as of February 27, 2024 between Counterparty and X.X. Xxxxxx Securities LLC, BofA Securities, Inc.,
Citigroup Global Markets Inc. and Xxxxx Fargo Securities, LLC, as representatives of the Initial Purchasers party thereto (the
“Initial Purchasers”), are true and correct on and as of the Trade Date and the Premium Payment Date and are
hereby deemed to be repeated to Dealer as if set forth herein. Counterparty hereby further represents and warrants to Dealer on
the date hereof and on and as of the Premium Payment Date (or such other date as specified below) that:
| (a) | Counterparty
has all necessary corporate power and authority to execute, deliver and perform its obligations
in respect of the Transaction; such execution, delivery and performance have been duly
authorized by all necessary corporate action on Counterparty’s part; and this Confirmation
has been duly and validly executed and delivered by Counterparty and constitutes its
valid and binding obligation, enforceable against Counterparty in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity) and except that rights to indemnification
and contribution hereunder may be limited by federal or state securities laws or public
policy relating thereto. |
| (b) | In
lieu of the representation set forth in Section 3(a)(iii) of the Agreement, neither the
execution and delivery of this Confirmation nor the incurrence or performance of obligations
of Counterparty hereunder will conflict with or result in a breach of the certificate
of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable
law or regulation, or any order, writ, injunction or decree of any court or governmental
authority or agency, or any agreement or instrument to which Counterparty or any of its
subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound
or to which Counterparty or any of its subsidiaries is subject, or constitute a default
under, or result in the creation of any lien under, any such agreement or instrument. |
| (c) | No
consent, approval, authorization, or order of, or filing with, any governmental agency
or body or any court is required in connection with the execution, delivery or performance
by Counterparty of this Confirmation, except such as have been obtained or made and such
as may be required under the Securities Act or state securities laws. |
| (d) | Counterparty
is not and, after consummation of the transactions contemplated hereby, will not be required
to register as an “investment company” as such term is defined in the Investment
Company Act of 1940, as amended. |
| (e) | Counterparty
is an “eligible contract participant” (as such term is defined in Section
1a(18) of the Commodity Exchange Act, as amended, other than a person that is an eligible
contract participant under Section 1a(18)(C) of the Commodity Exchange Act). |
| (f) | Counterparty
is not, on the date hereof, aware of any material non-public information with respect
to Counterparty or the Shares. |
| (g) | To
the knowledge of Counterparty, no state or local (including any non-U.S. jurisdiction’s)
law, rule, regulation or regulatory order applicable to the Shares would give rise to
any reporting, consent, registration or other requirement (including without limitation
a requirement to obtain prior approval from any person or entity) as a result of Dealer
or its affiliates owning or holding (however defined) Shares; provided that Counterparty
makes no representation or warranty regarding any such requirement that is applicable
generally to the ownership of, or transactions in, common equity securities of a U.S.
incorporated corporation listed on the Exchange by Dealer or any of its affiliates solely
as a result of it or any of such affiliates being a financial institution or broker-dealer. |
| (h) | Counterparty
(A) is capable of evaluating investment risks independently, both in general and with
regard to all transactions and investment strategies involving a security or securities;
(B) will exercise independent judgment in evaluating the recommendations of any broker-dealer
or its associated persons, unless it has otherwise notified the broker-dealer in writing;
and (C) has total assets of at least USD 50 million. |
| (i) | The
assets of Counterparty do not constitute “plan assets” under the Employee
Retirement Income Security Act of 1974, as amended, the Department of Labor Regulations
promulgated thereunder or similar law. |
| (j) | As
of and immediately after each of the Trade Date and the Premium Payment Date, (A) the
value of the total assets of Counterparty is greater than the sum of the total liabilities
(including contingent liabilities) and the capital (as such terms are defined in Section
154 and Section 244 of the General Corporation Law of the State of Delaware) of Counterparty,
(B) the capital of Counterparty is adequate to conduct its business, and its entry into
the Transaction will not impair its capital, (C) Counterparty has the ability to
pay its debts and obligations as such debts mature and does not intend to, and does not
believe that it will, incur debt beyond its ability to pay as such debts mature, (D)
Counterparty will be able to continue as a going concern, (E) Counterparty is not, and
will not be, “insolvent” (as such term is defined under Section 101(32) of
the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy
Code”)) and (F) Counterparty would be able to purchase the Number of Shares
with respect to the Transaction in compliance with the laws of its jurisdiction of incorporation
(including the adequate surplus and capital requirements of Sections 154 and 160 of the
General Corporation Law of the State of Delaware). |
| (k) | Counterparty
acknowledges that the Transaction may constitute a purchase of its equity securities
or a capital distribution. Counterparty further acknowledges that, pursuant to the provisions
of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”),
the Counterparty will be required to agree to certain time-bound restrictions on its
ability to purchase its equity securities or make capital distributions if it receives
loans, loan guarantees or direct loans (as that term is defined in the CARES Act) under
section 4003(b) of the CARES Act. Counterparty further acknowledges that it may be required
to agree to certain time-bound restrictions on its ability to purchase its equity securities
or make capital distributions if it receives loans, loan guarantees or direct loans (as
that term is defined in the CARES Act) under programs or facilities established by the
Board of Governors of the Federal Reserve System or the U.S. Department of Treasury for
the purpose of providing liquidity to the financial system, and may be required to agree
to similar restrictions under programs or facilities established in the future. Accordingly,
Counterparty represents and warrants that neither it nor any of its subsidiaries has
applied for, and throughout the term of this Transaction shall not apply, for a loan,
loan guarantee, direct loan (as that term is defined in the CARES Act) or other investment,
or to receive any financial assistance or relief (howsoever defined) under any program
or facility that (a) is established under applicable law (whether in existence as of
the Trade Date or subsequently enacted, adopted or amended), including without limitation
the CARES Act and the Federal Reserve Act, as amended, and (b) requires under applicable
law (or any regulation, guidance, interpretation or other pronouncement thereunder),
as a condition of such loan, loan guarantee, direct loan (as that term is defined in
the CARES Act), investment, financial assistance or relief, that Counterparty or any
of its subsidiaries agree, attest, certify or warrant that it has not, as of the date
specified in such condition, repurchased, or will not repurchase, any equity security
of Counterparty, and that it has not, as of the date specified in such condition, made
a capital distribution or will not make a capital distribution (collectively, “Restricted
Financial Assistance”); provided, that Counterparty may apply for Restricted
Financial Assistance if Counterparty either (a) determines, based on the advice of outside
counsel of national standing, that the terms of the Transaction would not cause Counterparty
to fail to satisfy any condition for application for or receipt or retention of such
loan, loan guarantee, direct loan (as that term is defined in the CARES Act), investment,
financial assistance or relief based on the terms of the program or facility as of the
date of such advice or (b) delivers to Dealer evidence of a waiver or other guidance
from a governmental authority with jurisdiction for such program or facility that the
Transaction is permitted under such program or facility (either by specific reference
to the Transaction or by general reference to transactions with attributes of the Transaction
in all relevant respects). Counterparty further represents and warrants that the Premium
is not being paid, in whole or in part, directly or indirectly, with funds received under
or pursuant to any program or facility, including the U.S. Small Business Administration’s
“Paycheck Protection Program”, that (a) is established under applicable law
(whether in existence as of the Trade Date or subsequently enacted, adopted or amended),
including without limitation the CARES Act and the Federal Reserve Act, as amended, and
(b) requires under such applicable law (or any regulation, guidance, interpretation or
other pronouncement of a governmental authority with jurisdiction for such program or
facility) that such funds be used for specified or enumerated purposes that do not include
the purchase of this Transaction (either by specific reference to this Transaction or
by general reference to transactions with the attributes of this Transaction in all relevant
respects). |
| 9. | Representation
and Warranty of the Dealer. |
| (a) | Dealer
hereby represents and warrants to Counterparty on the date hereof and on and as of the
Premium Payment Date, that Dealer is an “eligible contract participant” (as
such term is defined in Section 1a(18) of the Commodity Exchange Act, other than
a person that is an eligible contract participant under Section 1a(18)(C) of the
Commodity Exchange Act). |
| (a) | Opinions.
On or prior to the Premium Payment Date, Counterparty shall deliver to Dealer an opinion
of counsel, dated as of the Premium Payment Date, with respect to the matters set forth
in Sections 8(a) through (d) of this Confirmation, subject to customary exceptions and
limitations (and, with respect to absence of conflicts with agreements or instruments,
limited to those agreements and instruments filed by Counterparty as exhibits to its
Form 10-K filed with the SEC, as updated by any subsequent filings). Delivery of such
opinion to Dealer shall be a condition precedent for the purpose of Section 2(a)(iii)
of the Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the
Agreement. |
| (b) | Repurchase
Notices. Counterparty shall, on any day on which Counterparty effects any repurchase
of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase
Notice”) on such day if following such repurchase, the number of outstanding
Shares as determined on such day is (i) less than [__]11 million (in the case
of the first such notice) or (ii) thereafter more than [__]12 million less
than the number of Shares included in the immediately preceding Repurchase Notice; provided
that Counterparty may provide Dealer advance notice on or prior to any such day,
which may include the maximum number of Shares that may be repurchased under a repurchase
program entered into in reliance or Rule 10b5-1(c) and the approximate period in which
such purchases may occur, to the extent it expects that repurchases effected on such
day may result in an obligation to deliver a Repurchase Notice (and in such case, any
such advance notice shall be deemed a Repurchase Notice to the maximum extent of repurchases
set forth in such advance notice as if Counterparty had executed such repurchases); provided
further that, if such repurchase, or the intention to effect the same, would constitute
material non-public information with respect to Counterparty or the Shares, Counterparty
shall make public disclosure thereof at or prior to delivery of such Repurchase Notice.
Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their
respective officers, directors, employees, affiliates, advisors, agents and controlling
persons (each, an “Indemnified Person”) from and against any and all
losses (including losses relating to Dealer’s hedging activities as a consequence
of becoming, or of the risk of becoming, a Section 16 “insider”, including
without limitation, any forbearance from hedging activities or cessation of hedging activities
and any losses in connection therewith with respect to the Transaction), claims, damages,
judgments, liabilities and reasonable and documented out-of-pocket expenses (including
reasonable attorney’s fees of one outside counsel in each relevant jurisdiction),
joint or several, which an Indemnified Person may become subject to, as a result of Counterparty’s
failure to provide Dealer with a Repurchase Notice on the day and in the manner specified
in this paragraph, and to reimburse, within 30 days, upon written request, each of such
Indemnified Persons for any reasonable legal or other out-of-pocket expenses incurred
(and supported by invoices or other documentation setting forth in reasonable detail
such expenses) in connection with investigating, preparing for, providing testimony or
other evidence in connection with or defending any of the foregoing. If any suit, action,
proceeding (including any governmental or regulatory investigation), claim or demand
shall be brought or asserted against the Indemnified Person as a result of Counterparty’s
failure to provide Dealer with a Repurchase Notice in accordance with this paragraph,
such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty,
upon request of the Indemnified Person, shall retain counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person and any others Counterparty
may designate in such proceeding and shall pay the reasonable fees and expenses of such
counsel related to such proceeding. Counterparty shall not be liable to the extent that
the Indemnified Person fails to notify Counterparty within a commercially reasonable
period of time after any action is commenced against it in respect of which indemnity
may be sought hereunder (it being understood that any such notice delivered within 30
calendar days of the commencement of any such action shall be deemed to have been delivered
within a commercially reasonable period of time for such purpose), but only to the extent
that Counterparty is materially prejudiced by such failure to provide such notice. In
addition, Counterparty shall not have liability for any settlement of any proceeding
contemplated by this paragraph that is effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, Counterparty agrees
to indemnify any Indemnified Person from and against any loss or liability by reason
of such settlement or judgment. Counterparty shall not, without the prior written consent
of the Indemnified Person, effect any settlement of any pending or threatened proceeding
contemplated by this paragraph that is in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by such Indemnified
Person, unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such proceeding on
terms reasonably satisfactory to such Indemnified Person. Counterparty shall not be liable
for any losses, claims, damages or liabilities (or expenses relating thereto) of any
Indemnified Person that result from the bad faith, gross negligence, willful misconduct
or fraud of such Indemnified Person (in each case, as conclusively determined by a court
of competent jurisdiction in a final and non-appealable judgment). If the indemnification
provided for in this paragraph is unavailable to an Indemnified Person or insufficient
in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty
hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall contribute
to the amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities. The remedies provided for in this paragraph (b) are not
exclusive and shall not limit any rights or remedies which may otherwise be available
to any Indemnified Person at law or in equity. The indemnity and contribution agreements
contained in this paragraph shall remain operative and in full force and effect regardless
of the termination of the Transaction. |
11
Insert the number of Shares outstanding that would cause Dealer’s current position in the Shares underlying the Transaction
(including the number of Shares underlying any additional transaction if the greenshoe is exercised in full, and any Shares under
pre-existing call option transactions with Counterparty) to increase by 0.5%. To be based on Dealer with the largest Applicable
Percentage.
12
Insert the number of Shares that, if repurchased, would cause Dealer’s current position in the Shares underlying the
Transaction (including the number of Shares underlying any additional transaction if the greenshoe is exercised in full, and any
Shares under pre-existing call option transactions with Counterparty) to increase by a further 0.5% from the threshold for the
first Repurchase Notice. To be based on Dealer with the largest Applicable Percentage.
| (c) | Regulation
M. Counterparty is not on the Trade Date engaged in a distribution, as such term
is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), of any securities of Counterparty, other than a distribution meeting
the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation
M. Counterparty shall not, until the second Scheduled Trading Day immediately following
the Effective Date, engage in any such distribution. |
| (d) | No
Manipulation. Counterparty is not entering into the Transaction to create actual
or apparent trading activity in the Shares (or any security convertible into or exchangeable
for the Shares) or to raise or depress or otherwise manipulate the price of the Shares
(or any security convertible into or exchangeable for the Shares) or otherwise in violation
of the Exchange Act. |
| (e) | Transfer
or Assignment. |
| (i) | Counterparty
shall have the right to transfer or assign its rights and obligations hereunder with
respect to all, but not less than all, of the Options hereunder (such Options, the “Transfer
Options”); provided that such transfer or assignment shall be subject
to reasonable conditions that Dealer may impose that are generally applicable in similar
situations (if any) and applied in a non-discriminatory manner, including but not limited,
to the following conditions: |
| (A) | With
respect to any Transfer Options, Counterparty shall not be released from its notice and
indemnification obligations pursuant to Section (b) or any obligations under Section
(o) or(t) of this Confirmation; |
| (B) | Any
Transfer Options shall only be transferred or assigned to a third party that is a United
States person (as defined in Section 7701(a)(30) of the Internal Revenue Code of 1986,
as amended (the “Code”)); |
| (C) | Such
transfer or assignment shall be effected on terms, including any reasonable undertakings
by such third party (including, but not limited to, an undertaking with respect to compliance
with applicable securities laws in a manner that, in the reasonable judgment of Dealer,
will not expose Dealer to material risks under applicable securities laws) and execution
of any documentation and delivery of legal opinions with respect to applicable securities
laws and other matters by such third party and Counterparty, as are requested and reasonably
satisfactory to Dealer; |
| (D) | Dealer
will not, as a result of such transfer and assignment, be required to pay the transferee
on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than
an amount that Dealer would have been required to pay to Counterparty in the absence
of such transfer and assignment, nor receive from the transferee on any payment date
an amount under Section 2(d)(i)(4) of the Agreement that is less than the amount that
Dealer would have received from Counterparty in the absence of such transfer and assignment; |
| (E) | An
Event of Default, Potential Event of Default or Termination Event will not occur as a
result of such transfer and assignment; |
| (F) | Without
limiting the generality of clause (B), Counterparty shall cause the transferee to make
such Payee Tax Representations and to provide such tax documentation as may be reasonably
requested by Dealer to permit Dealer to determine that results described in clauses (D)
and (E) will not occur upon or after such transfer and assignment; and |
| (G) | Counterparty
shall be responsible for all commercially reasonable costs and expenses, including commercially
reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment. |
| (ii) | Dealer
may, (A) without Counterparty’s consent, transfer or assign (a “Transfer”)
all or any part of its rights or obligations under the Transaction to any affiliate or
branch of Dealer (1) that has a rating for its long term, unsecured and unsubordinated
indebtedness that is equal to or better than Dealer’s credit rating at the time
of such Transfer, or (2) whose obligations hereunder will be guaranteed, pursuant to
the terms of a customary guarantee in a form used by Dealer generally for similar transactions,
by Dealer or Dealer’s ultimate parent, or (B) with Counterparty’s consent
(which consent will not be unreasonably withheld) to any other third party with a rating
for its long term, unsecured and unsubordinated indebtedness equal to or better than
the lesser of (1) the credit rating of Dealer at the time of the Transfer and (2) BBB+
by Standard and Poor’s Rating Group, Inc. or its successor (“S&P”),
or Baa1 by Xxxxx’x Investor Service, Inc. (“Moody’s”)
or, if either S&P or Moody’s ceases to rate such debt, at least an equivalent
rating or better by a substitute rating agency mutually agreed by Counterparty and Dealer;
provided that such transferee is an “eligible contract participant”
(as such term is defined in Section 1a(18) of the Commodity Exchange Act, as amended);
provided further that, in the case of a transfer or assignment under (A) or (B)
above, (i) under the applicable law effective on the date of transfer or assignment by
Dealer, (1) Counterparty will not, as a result of such transfer or assignment, be required
to pay the transferee or assignee on any payment date an amount under Section 2(d)(i)(4)
of the Agreement greater than an amount that Counterparty would have been required to
pay to Dealer in the absence of such transfer or assignment, (2) Counterparty will
not, as a result of such transfer or assignment, receive from the transferee or assignee
on any payment date an amount under Section 2(d)(i)(4) of the Agreement that is less
than the amount that Counterparty would have received from Dealer in the absence of such
transfer or assignment and (3) such transfer or assignment would not result in a taxable
exchange from Counterparty’s perspective for U.S. federal income tax purposes;
(ii) Dealer shall cause the transferee to make such Payee Tax Representations and to
provide such tax documentation as may be reasonably requested by Counterparty to permit
Counterparty to determine that the results described in clause (i) of this proviso will
not occur upon or after such transfer or assignment; and (iii) Dealer shall
provide prompt written notice to Counterparty following any such Transfer. If at any
time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Option Equity Percentage
exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies)
(any such condition described in clauses (A), (B) or (C), an “Excess Ownership
Position”), Dealer is unable after using its commercially reasonable efforts
to effect a transfer or assignment of Options to a third party on pricing terms reasonably
acceptable to Dealer and within a time period reasonably acceptable to Dealer such that
(after giving effect to such transfer or assignment and any resulting change in Dealer’s
commercially reasonable Hedge Positions) no Excess Ownership Position exists, then Dealer
may designate any Exchange Business Day as an Early Termination Date with respect to
a portion of the Transaction (the “Terminated Portion”), such that
(after giving effect to such transfer or assignment and any resulting change in Dealer’s
commercially reasonable Hedge Positions) following such partial termination no Excess
Ownership Position exists. In the event that Dealer so designates an Early Termination
Date with respect to a portion of the Transaction, a payment shall be made pursuant to
Section 6 of the Agreement as if (1) an Early Termination Date had been designated in
respect of a Transaction having terms identical to the Transaction and a Number of Options
equal to the number of Options underlying the Terminated Portion, (2) Counterparty
were the sole Affected Party with respect to such partial termination and (3) the Terminated
Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions
of Section 10(m) shall apply to any amount that is payable by Dealer to Counterparty
pursuant to this sentence as if Counterparty was not the Affected Party). The “Section
16 Percentage” as of any day is the fraction, expressed as a percentage, (A)
the numerator of which is the number of Shares that Dealer and any of its affiliates
or any other person subject to aggregation with Dealer for purposes of the “beneficial
ownership” test under Section 13 of the Exchange Act, or any “group”
(within the meaning of Section 13 of the Exchange Act) of which Dealer is or may be deemed
to be a part beneficially owns (within the meaning of Section 13 of the Exchange Act),
without duplication, on such day (or, to the extent that for any reason the equivalent
calculation under Section 16 of the Exchange Act and the rules and regulations thereunder
results in a higher number, such higher number) and (B) the denominator of which is the
number of Shares outstanding on such day. The “Option Equity Percentage”
as of any day is the fraction, expressed as a percentage, (A) the numerator of which
is the sum of (1) the product of the Number of Options and the Option Entitlement and
(2) the aggregate number of Shares underlying any other call option transaction sold
by Dealer to Counterparty, and (B) the denominator of which is the number of Shares outstanding
on such day. The “Share Amount” as of any day is the number of Shares
that Dealer and any person whose ownership position would be aggregated with that of
Dealer (Dealer or any such person, a “Dealer Person”) under any law,
rule, regulation, regulatory order or organizational documents or contracts of Counterparty
that are, in each case, applicable to ownership of Shares (“Applicable Restrictions”),
owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise
meets a relevant definition of ownership under any Applicable Restriction, as determined
by Dealer in its reasonable discretion. The “Applicable Share Limit”
means a number of Shares equal to (A) the minimum number of Shares that could reasonably
be expected to give rise to reporting or registration obligations (except for any filing
requirements on Form 13F, Schedule 13D or Schedule 13G under the Exchange Act, in each
case, as in effect on the Trade Date) or other requirements (including obtaining prior
approval from any person or entity) of a Dealer Person, or could reasonably be expected
to result in an adverse effect on a Dealer Person, under any Applicable Restriction,
as determined by Dealer in its reasonable discretion, minus (B) 1% of the number
of Shares outstanding. |
| (iii) | Notwithstanding
any other provision in this Confirmation to the contrary requiring or allowing Dealer
to purchase, sell, receive or deliver any Shares or other securities, or make or receive
any payment in cash, to or from Counterparty, Dealer may designate any of its affiliates
(each, a “Dealer Designated Affiliate”) to purchase, sell, receive
or deliver such Shares or other securities, or to make or receive such payment in cash,
and otherwise to perform Dealer’s obligations in respect of the Transaction and
any such designee may assume such obligations; provided, that, to the extent applicable,
such Dealer Designated Affiliate shall comply with the provisions of the Transaction
in the same manner as Dealer would have been required to comply. Dealer shall be discharged
of its obligations to Counterparty to the extent such Dealer Designated Affiliate fully
performs the obligations designated by Dealer to such Dealer Designated Affiliate under
this Section (iii). |
| (f) | Staggered
Settlement. If upon advice of counsel with respect to applicable legal and regulatory
requirements, including any requirements relating to Dealer’s commercially reasonable
hedging activities hereunder, Dealer reasonably determines that it would not be practicable
or advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to
be delivered by Dealer on any Settlement Date for the Transaction, Dealer may, by notice
to Counterparty on or prior to any Settlement Date (a “Nominal Settlement Date”),
elect to deliver the Shares on two or more dates (each, a “Staggered Settlement
Date”) as follows: |
| (i) | in
such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates
(each of which will be on or prior to the Nominal Settlement Date) and the number of
Shares that it will deliver on each Staggered Settlement Date; |
| (ii) | the
aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all
such Staggered Settlement Dates will equal the number of Shares that Dealer would otherwise
be required to deliver on such Nominal Settlement Date; and |
| (iii) | if
the Net Share Settlement terms or the Combination Settlement terms set forth above were
to apply on the Nominal Settlement Date, then the Net Share Settlement terms or the Combination
Settlement terms, as the case may be, will apply on each Staggered Settlement Date, except
that the Shares otherwise deliverable on such Nominal Settlement Date will be allocated
among such Staggered Settlement Dates as specified by Dealer in the notice referred to
in clause (i) above. |
| (g) | [Insert
relevant Dealer agency language, if any.][Reserved.] |
| (h) | Dividends.
If at any time during the period from and including the Effective Date, to but excluding
the Expiration Date, (i) an ex-dividend date for a regular quarterly cash dividend occurs
with respect to the Shares (an “Ex-Dividend Date”), and that dividend
is less than the Regular Dividend on a per Share basis or (ii) if no Ex-Dividend Date
for a regular quarterly cash dividend occurs with respect to the Shares in any quarterly
dividend period of Counterparty, then the Calculation Agent will adjust the Cap Price
to preserve the fair value of the Options after taking into account such dividend or
lack thereof. “Regular Dividend” shall mean USD 0.175 per Share per
quarter. Upon any adjustment to the [“Dividend Threshold”] (as defined in
the Indenture) for the Convertible Notes pursuant to the Indenture, the Calculation Agent
will make a corresponding adjustment to the Regular Dividend for the Transaction. |
| (i) | Additional
Termination Events. |
| (i) | Notwithstanding
anything to the contrary in this Confirmation, upon any Early Conversion in respect of
which a “Notice of Conversion” (as defined in the Indenture) that is effective
as to Counterparty has been delivered by the relevant converting Holder: |
| (A) | Counterparty
shall, within five Scheduled Trading Days of the “Conversion Date” (as defined
in the Indenture) for such Early Conversion, provide written notice (an “Early
Conversion Notice”) to Dealer specifying the number of Convertible Notes surrendered
for conversion on such Conversion Date (such Convertible Notes, the “Affected
Convertible Notes”) and the anticipated settlement date, and the giving
of such Early Conversion Notice shall constitute an Additional Termination Event
as provided in this clause (i); |
| (B) | upon
receipt of any such Early Conversion Notice, Dealer shall designate an Exchange Business
Day as an Early Termination Date (which Exchange Business Day shall be no earlier than
one Scheduled Valid Day following the Conversion Date for such Early Conversion) with
respect to the portion of the Transaction corresponding to a number of Options (the “Affected
Number of Options”) equal to the lesser of (x) the number of Affected Convertible
Notes [minus the “Affected Number of Options” (as defined in the Base
Call Option Confirmation), if any, that relate to such Affected Convertible Notes]13
and (y) the Number of Options as of the Conversion Date for such Early Conversion; |
| (C) | any
payment hereunder with respect to such termination shall be calculated pursuant to Section
6 of the Agreement as if (x) an Early Termination Date had been designated in respect
of a Transaction having terms identical to the Transaction and a Number of Options equal
to the Affected Number of Options, (y) Counterparty were the sole Affected Party with
respect to such Additional Termination Event and (z) the terminated portion of the Transaction
were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of
Section 10(m) shall apply to any amount that is payable by Dealer to Counterparty pursuant
to this Section 10(i)(i)(C) as if, solely for the purpose of electing the settlement
method, Counterparty were not the Affected Party); provided that the amount payable
with respect to such termination shall not be greater than (1) the Applicable Percentage,
multiplied by (2) the Affected Number of Options, multiplied by (3) (x) the sum of (i)
the amount of cash paid (if any) and (ii) the number of Shares delivered (if any) to
the Holder (as such term is defined in the Indenture) of an Affected Convertible Note
upon conversion of such Affected Convertible Note, multiplied by the Applicable Limit
Price on the settlement date for the conversion of such Affected Convertible Note, minus
(y) USD 1,000. |
| (D) | for
the avoidance of doubt, in determining the amount payable in respect of such Affected
Transaction pursuant to Section 6 of the Agreement, the Calculation Agent shall assume
that (x) the relevant Early Conversion and any conversions, adjustments, agreements,
payments, deliveries or acquisitions by or on behalf of Counterparty leading thereto
had not occurred, (y) no adjustments to the “Conversion Rate” (as defined
in the Indenture) have occurred pursuant to any Excluded Provision and (z) the corresponding
Convertible Notes remain outstanding until their final maturity date; and |
| (E) | the
Transaction shall remain in full force and effect, except that, as of the Conversion
Date for such Early Conversion, the Number of Options shall be reduced by the Affected
Number of Options. |
13
Include in Additional Call Option Confirmation only.
| (ii) | Notwithstanding
anything to the contrary in this Confirmation if an event of default with respect to
Counterparty occurs under the terms of the Convertible Notes as set forth in Section
[7.01] of the Indenture and such event of default results in the Convertible Notes being
accelerated and declared due and payable, then such event of default shall constitute
an Additional Termination Event applicable to the Transaction and, with respect to such
Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected
Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall
be the party entitled to designate an Early Termination Date pursuant to Section 6(b)
of the Agreement (which Early Termination Date shall be on or as promptly as reasonably
practicable after Dealer becomes aware of the occurrence of such acceleration). |
| (iii) | Within
five Scheduled Trading Days following any Repayment Event (as defined below), Counterparty
(x) in the case of a Repayment Event pursuant to Section [4.02] of the Indenture or Section
[4.03] of the Indenture, shall notify Dealer in writing of such Repayment Event and (y)
in the case of a Repayment Event not described in clause (x) above, may notify Dealer
in writing of such Repayment Event, in each case, including the aggregate principal amount
of Convertible Notes (the “Repayment Convertible Notes”) subject to
such Repayment Event (any such notice, a “Repayment Notice”); provided
that no such Repayment Notice described in clause (y) above shall be effective unless
it contains the representation by Counterparty set forth in Section 8(f) as of the date
of such Repayment Notice[; provided further that any “Repayment Notice”
delivered to Dealer pursuant to the Base Call Option Confirmation shall be deemed to
be a Repayment Notice pursuant to this Confirmation and the terms of such Repayment Notice
shall apply, mutatis mutandis, to this Confirmation]14. The receipt
by Dealer from Counterparty of any Repayment Notice shall constitute an Additional Termination
Event as provided in this Section 10(i)(iii). Upon receipt of any such Repayment
Notice, Dealer shall designate an Exchange Business Day following receipt of such Repayment
Notice as an Early Termination Date with respect to the portion of the Transaction corresponding
to a number of Options (the “Repayment Options”) equal to the lesser
of (A) [(x)] the aggregate principal amount of such Convertible Notes specified in such
Repayment Notice, divided by USD 1,000, [minus (y) the number of “Repayment
Options” (as defined in the Base Call Option Confirmation), if any, that relate
to such Convertible Notes (and for the purposes of determining whether any Options under
this Confirmation or under the Base Call Option Confirmation will be among the Repayment
Options hereunder or under, and as defined in, the Base Call Option Confirmation, the
Convertible Notes specified in such Repayment Notice shall be allocated first to the
Base Call Option Confirmation until all Options thereunder are exercised or terminated)]15,
and (B) the Number of Options as of the date Dealer designates such Early Termination
Date and, as of such date, the Number of Options shall be reduced by the number of Repayment
Options. Any payment hereunder with respect to such termination (the “Repayment
Unwind Payment”) shall be calculated pursuant to Section 6 of the Agreement
as if (1) an Early Termination Date had been designated in respect of a Transaction having
terms identical to the Transaction and a Number of Options equal to the number of Repayment
Options, (2) Counterparty were the sole Affected Party with respect to such Additional
Termination Event and (3) the terminated portion of the Transaction were the sole Affected
Transaction; provided that in the event of a Repayment Event pursuant to Section
[4.02] of the Indenture or Section [4.03] of the Indenture, the Repayment Unwind Payment
shall not be greater than (x) the number of Repayment Options multiplied by (y)
the product of (A) the Applicable Percentage and (B) the excess, if any, of (I) the amount
paid by the Counterparty per Convertible Note pursuant to the relevant sections of the
Indenture over (II) USD 1,000. “Repayment Event” means that (i) any
Convertible Notes are repurchased or redeemed (whether in connection with or as a result
of a fundamental change, howsoever defined, or for any other reason) by Counterparty
or any of its subsidiaries, (ii) any Convertible Notes are delivered to Counterparty
or any of its subsidiaries in exchange for delivery of any property or assets of such
party (howsoever described), (iii) any principal of any of the Convertible Notes is repaid
prior to the final maturity date of the Convertible Notes (for any reason other than
as a result of an acceleration of the Convertible Notes that results in an Additional
Termination Event pursuant to Section 10(i)(ii)), or (iv) any Convertible Notes are exchanged
by or for the benefit of the “Holders” (as defined in the Indenture) thereof
for any other securities of Counterparty or any of its subsidiaries (or any other property,
or any combination thereof) pursuant to any exchange offer or similar transaction. For
the avoidance of doubt, any conversion of Convertible Notes (whether into cash, Shares,
[“Reference Property”] (as defined in the Indenture) or any combination thereof)
pursuant to the terms of the Indenture shall not constitute a Repayment Event. |
14
Insert for Additional Call Option Confirmation.
15
Insert for Additional Call Option Confirmation.
| (iv) | Notwithstanding
anything to the contrary in this Confirmation, the occurrence of an Amendment Event shall
constitute an Additional Termination Event applicable to the Transaction and, with respect
to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole
Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer
shall be the party entitled to designate an Early Termination Date pursuant to Section
6(b) of the Agreement. “Amendment Event” means that Counterparty amends,
modifies, supplements, waives or obtains a waiver in respect of any term of the Indenture
or the Convertible Notes governing the principal amount, coupon, maturity, repurchase
obligation of Counterparty, redemption right of Counterparty, any term relating to conversion
of the Convertible Notes (including changes to the conversion rate, conversion rate adjustment
provisions, conversion settlement dates or conversion conditions), or any term that would
require consent of the holders of not less than 100% of the principal amount of the Convertible
Notes to amend (other than, in each case, any amendment or supplement (x) pursuant to
Section [8.01(I)] of the Indenture that, as determined by the Calculation Agent, conforms
the Indenture to the description of Convertible Notes in the Offering Memorandum or (y)
pursuant to Section [5.09] of the Indenture), in each case, without the consent of Dealer
(such consent not to be unreasonably withheld or delayed). |
| (j) | Amendments
to Equity Definitions. |
| (i) | Solely
in respect of adjustments to the Cap Price pursuant to Section 10(y), Section 11.2(e)(vii)
of the Equity Definitions is hereby amended by deleting the words “that may have
a diluting or concentrative effect on the theoretical value of the relevant Shares”
and replacing them with the words “that is the result of a corporate event involving
the Issuer or its securities that has a material economic effect on the Shares or options
on the Shares; provided that such event is not based on (a) an observable
market, other than the market for Issuer’s own stock or (b) an observable
index, other than an index calculated and measured solely by reference to Issuer’s
own operations.” |
| (ii) | Section
12.6(a)(ii) of the Equity Definitions is hereby amended by (1) inserting “(1)”
immediately following the word “means” in the first line thereof and (2)
inserting immediately prior to the semi-colon at the end of subsection (B) thereof the
following words: “or (2) the occurrence of any of the events specified in Section
5(a)(vii)(1) through (9) of the ISDA Master Agreement with respect to that Issuer; provided
that the period for dismissal, discharge, stay or restraint therein shall be increased
from within 15 days to within 30 days.” |
| (iii) | Without
derogating from the provisions of Section 5(b)(i) of the Agreement, Section 12.9(b)(i)
of the Equity Definitions is hereby amended by (1) replacing “either party may
elect” with “Dealer may elect” and (2) replacing “notice to the
other party” with “notice to Counterparty” in the first sentence of
such section. |
| (k) | Setoff.
Neither party shall have the right to set off any obligation that it may have to the
other party under the Transaction against any obligation such other party may have to
it, whether arising under the Agreement, this Confirmation or any other agreement between
the parties hereto, by operation of law or otherwise and each party hereby waives any
such right to setoff. |
| (l) | Adjustments.
For the avoidance of doubt, whenever the Hedging Party, Determining Party or Calculation
Agent is required or permitted to make a calculation, adjustment, determination or election
pursuant to the terms of this Confirmation or the Equity Definitions to take into account
the effect of an event (other than on adjustments made by reference to the Indenture),
the Hedging Party, Determining Party or Calculation Agent shall make such adjustment
in a commercially reasonable manner by reference to the effect of such event on Dealer,
assuming that Dealer maintains a commercially reasonable hedge position. |
| (m) | Alternative
Calculations and Payment on Early Termination and on Certain Extraordinary Events.
If (a) an Early Termination Date (whether as a result of an Event of Default or a Termination
Event) occurs or is designated with respect to the Transaction or (b) the Transaction
is cancelled or terminated upon the occurrence of an Extraordinary Event (except as a
result of (i) a Nationalization, Insolvency or Merger Event in which the consideration
to be paid to holders of Shares consists solely of cash, (ii) an Announcement Event,
a Merger Event or Tender Offer that is within Counterparty’s control, or (iii)
an Event of Default in which Counterparty is the Defaulting Party or a Termination Event
in which Counterparty is the Affected Party other than an Event of Default of the type
described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination
Event of the type described in Section 5(b) of the Agreement, in each case that resulted
from an event or events outside Counterparty’s control), and if Dealer would owe
any amount to Counterparty pursuant to Section 6(d)(ii) of the Agreement or any Cancellation
Amount pursuant to Article 12 of the Equity Definitions (any such amount, a “Payment
Obligation”), then Dealer shall satisfy the Payment Obligation by the Share
Termination Alternative (as defined below), unless (a) Counterparty gives irrevocable
telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no
later than 12:00 p.m. (New York City time) on the date of the Announcement Event, Merger
Date, Tender Offer Date, Announcement Date (in the case of a Nationalization, Insolvency
or Delisting), Early Termination Date or date of cancellation, as applicable, of its
election that the Share Termination Alternative shall not apply, (b) Counterparty remakes
the representation set forth in Section 8(f) as of the date of such election and (c)
Dealer agrees, in its commercially reasonable discretion, to such election, in which
case the provisions of Section 12.7 or Section 12.9 of the Equity Definitions, or the
provisions of Section 6(d)(ii) and Section 6(e) of the Agreement, as the case may be,
shall apply. |
| |
Share Termination Alternative: |
If applicable, Dealer shall deliver to Counterparty the Share Termination
Delivery Property on, or within a commercially reasonable period of time after, the date when the relevant Payment Obligation
would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement,
as applicable, in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of payment. |
| |
|
|
| |
Share Termination Delivery Property: |
A number of Share Termination Delivery Units, as calculated by
the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent
shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount
of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price. |
| |
|
|
| |
Share Termination Unit Price: |
The value of property contained in one Share Termination Delivery
Unit, as determined by the Calculation Agent in its reasonable discretion by commercially reasonable means and notified by
the Calculation Agent to Dealer at the time of notification of the Payment Obligation. |
| |
Share Termination Delivery Unit: |
One Share or, if the Shares have changed into cash or any other
property or the right to receive cash or any other property as the result of a Nationalization, Insolvency or Merger Event
(any such cash or other property, the “Exchange Property”), a unit consisting of the type and amount of
such Exchange Property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration
in lieu of fractional amounts of any securities) in such Nationalization, Insolvency or Merger Event, as determined by the
Calculation Agent in a commercially reasonable manner. If such Nationalization, Insolvency, or Merger Event involves a choice
of Exchange Property to be received by holders, such holder shall be deemed to have elected to receive the maximum possible
amount of cash. |
| |
|
|
| |
Failure to Deliver: |
Applicable. |
| |
|
|
| |
Other Applicable Provisions: |
If Share Termination Alternative is applicable, the provisions
of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption
“Representation and Agreement” in Section 2 will be applicable, except that all references in such provisions
to “Physically-settled” shall be read as references to “Share Termination Settled” and all references
to “Shares” shall be read as references to “Share Termination Delivery Units”. “Share Termination
Settled” in relation to the Transaction means that Share Termination Alternative is applicable to the Transaction. |
| (n) | Waiver
of Jury Trial. Each party waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect of any suit, action or proceeding
relating to the Transaction. Each party (i) certifies that no representative, agent or
attorney of either party has represented, expressly or otherwise, that such other party
would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing
waiver and (ii) acknowledges that it and the other party have been induced to enter into
the Transaction, as applicable, by, among other things, the mutual waivers and certifications
provided herein. |
| (o) | Registration.
Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer,
based on the advice of counsel, the Shares (“Hedge Shares”) acquired
by Dealer for the purpose of effecting a commercially reasonable hedge of its obligations
pursuant to the Transaction cannot be sold in the public market by Dealer without registration
under the Securities Act, Counterparty shall, at its election, either (i) in order to
allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer
an effective registration statement under the Securities Act and enter into an agreement,
in form and substance reasonably satisfactory to Dealer, substantially in the form of
an underwriting agreement customary for a registered secondary offering of a similar
size in respect of a similar issuer; provided, however, that if Dealer,
in its sole reasonable discretion, is not satisfied with access to due diligence materials,
the results of its due diligence investigation, or the procedures and documentation for
the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph
shall apply at the election of Counterparty, (ii) in order to allow Dealer to sell the
Hedge Shares in a private placement, enter into a private placement agreement substantially
similar to private placement purchase agreements customary for private placements of
equity securities of a similar size in respect of a similar issuer, in form and substance
reasonably satisfactory to Dealer (in which case, the Calculation Agent shall make any
adjustments to the terms of the Transaction that are necessary, in its commercially reasonable
judgment, to compensate Dealer for any commercially reasonable discount from the public
market price of the Shares incurred on the sale of Hedge Shares in a private placement)
provided that no “comfort letter” or accountants’ consent shall
be required to be delivered in connection with any private placements, or (iii) purchase
the Hedge Shares from Dealer at the then-current market price on such Exchange Business
Days, and in the amounts and at such time(s), reasonably requested by Dealer. |
| |
(p) |
Tax Disclosure. Effective from
the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives,
or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of
the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty
relating to such tax treatment and tax structure. |
| |
|
|
| |
(q) |
Right to Extend. Dealer
may postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement Averaging Period or any other
date of valuation, payment or delivery by Dealer, with respect to some or all of the Options hereunder, if Dealer reasonably
determines, in the case of clause (i), in its commercially reasonable judgment or, in the case of clause (ii), based on advice
of counsel, that such action is reasonably necessary or appropriate (i) to preserve Dealer’s commercially reasonable
hedging or hedge unwind activity hereunder in light of existing liquidity conditions in the stock loan market or other relevant
market or (ii) to enable Dealer to effect transactions with respect to Shares in connection with its commercially reasonable
hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated
purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements, or
with related policies and procedures
adopted by Dealer
in good faith
so long as
such policies and procedures
are generally applicable in similar
situations and applied in a non-discriminatory manner; provided
that no such
Valid Day or
other date of
valuation, payment or
delivery may be
postponed or added
more than 120 Valid Days
after the original
Valid Day or
other date of
valuation, payment or
delivery, as the
case may be. |
| (r) | Status
of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation
is not intended to convey to Dealer rights against Counterparty with respect to the Transaction
that are senior to the claims of common stockholders of Counterparty in any United States
bankruptcy proceedings of Counterparty; provided that nothing herein shall limit
or shall be deemed to limit Dealer’s right to pursue remedies in the event of a
breach by Counterparty of its obligations and agreements with respect to the Transaction;
provided, further that nothing herein shall limit or shall be deemed to
limit Dealer’s rights in respect of any transactions other than the Transaction. |
| (s) | Securities
Contract; Swap Agreement.
The parties hereto intend for (i) the Transaction to be a “securities contract”
and a “swap agreement” as defined in the Bankruptcy Code, and the parties
hereto to be entitled to the protections afforded by, among other Sections, Sections
362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code, (ii) a party’s
right to liquidate the Transaction and to exercise any other remedies upon the occurrence
of any Event of Default under the Agreement with respect to the other party to constitute
a “contractual right” as described in the Bankruptcy Code, and (iii) each
payment and delivery of cash, securities or other property hereunder to constitute a
“margin payment” or “settlement payment” and a “transfer”
as defined in the Bankruptcy Code. |
| (t) | Notice
of Certain Other Events. Counterparty covenants and agrees that: |
| (i) | promptly
following the public announcement of the results of any election by the holders of Shares
with respect to the consideration due upon consummation of any Merger Event, Counterparty
shall give Dealer written notice of the weighted average of the types and amounts of
consideration received by holders of Shares upon consummation of such Merger Event (the
date of such notification, the “Consideration Notification Date”);
provided that in no event shall the Consideration Notification Date be later than
the date on which such Merger Event is consummated; and |
| (ii) | (A)
Counterparty shall give Dealer commercially reasonable advance (but in no event less
than one Exchange Business Day) written notice of the section or sections of the Indenture
and, if applicable, the formula therein, pursuant to which any adjustment will be made
to the Convertible Notes in connection with any Potential Adjustment Event (other than
a Potential Adjustment in respect of the Dilution Adjustment Provisions set forth in
Section [5.05(A)(ii)] or Section [5.05(A)(iv)] of the Indenture) or Merger Event
and (B) promptly following any such adjustment, Counterparty shall give Dealer written
notice of the details of such adjustment. The “Adjustment Notice Deadline”
means (i) for any Potential Adjustment in respect of the Dilution Adjustment Provision
set forth in Section [5.05(A)(i)] of the Indenture, the relevant [Ex-Dividend Date] (as
such term is defined in the Indenture) or [“effective date”] (as such term
is used in Section 5.05(A)(i) of the Indenture), as the case may be, (ii) for any Potential
Adjustment in respect of the Dilution Adjustment Provision in the first formula set forth
in Section [5.05(A)(iii)(1)] of the Indenture, the first [Trading Day] (as such term
is defined in the Indenture) of the period referred to in the definition of “SP”
in such formula, (iii) for any Potential Adjustment in respect of the Dilution Adjustment
Provision in the formula set forth in Section [5.05(A)(iii)(2)] of the Indenture, the
first [Trading Day] (as such term is defined in the Indenture) of the [Spin-off Valuation
Period] (as such term is defined in the Indenture), (iv) for any Potential Adjustment
in respect of the Dilution Adjustment Provision set forth in Section [5.05(A)(v)] of
the Indenture, the first [Trading Day] (as such term is defined in the Indenture) of
the period referred to in the definition of “SP” in the formula in such Section,
and (v) for any Merger Event, the effective date of such Merger Event (or, if earlier,
the first day of any valuation or similar period in respect of such Merger Event). |
| (u) | Wall
Street Transparency and Accountability Act. In connection with Section 739 of
the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”),
the parties hereby agree that neither the enactment of WSTAA or any regulation under
the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit
or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate,
modify, amend or supplement this Confirmation or the Agreement, as applicable, arising
from a termination event, force majeure, illegality, increased costs, regulatory change
or similar event under this Confirmation, the Equity Definitions incorporated herein,
or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging
Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as
defined in the Agreement)). |
| (v) | Agreements
and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges
and agrees that: (A) at any time on and prior to the Expiration Date, Dealer and its
affiliates may buy or sell Shares or other securities or buy or sell options or futures
contracts or enter into swaps or other derivative securities in order to adjust its hedge
position with respect to the Transaction; (B) Dealer and its affiliates also may be active
in the market for Shares other than in connection with hedging activities in relation
to the Transaction; (C) Dealer shall make its own determination as to whether, when or
in what manner any hedging or market activities in securities of Counterparty shall be
conducted and shall do so in a manner that it deems appropriate to hedge its price and
market risk with respect to the Relevant Prices; and (D) any market activities of Dealer
and its affiliates with respect to Shares may affect the market price and volatility
of Shares, as well as the Relevant Prices, each in a manner that may be adverse to Counterparty. |
| (w) | Early
Unwind. In the event the sale of the [“Firm Securities”]16
[“Option Securities”]17 (as
defined in the Purchase Agreement) is not consummated with the Initial Purchasers for
any reason, or Counterparty fails to deliver to Dealer opinions of counsel as required
pursuant to Section 10(a), in each case by 5:00 p.m. (New York City time) on the Premium
Payment Date, or such later date as agreed upon by the parties (the Premium Payment Date
or such later date, the “Early Unwind Date”), the Transaction
shall automatically terminate (the “Early Unwind”) on the Early
Unwind Date and (i) the Transaction and all of the respective rights and obligations
of Dealer and Counterparty under the Transaction shall be cancelled and terminated and
(ii) each party shall be released and discharged by the other party from and agrees not
to make any claim against the other party with respect to any obligations or liabilities
of the other party arising out of and to be performed in connection with the Transaction
either prior to or after the Early Unwind Date. Each of Dealer and Counterparty represents
and acknowledges to the other that, upon an Early Unwind, all obligations with respect
to the Transaction shall be deemed fully and finally discharged. |
| (x) | Payment
by Counterparty. In the event that, following payment of the Premium, (i) an
Early Termination Date occurs or is designated with respect to the Transaction as a result
of a Termination Event or an Event of Default (other than an Event of Default arising
under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Counterparty owes
to Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty
owes to Dealer, pursuant to Section 12.7 or Section 12.9 of the Equity Definitions, an
amount calculated under Section 12.8 of the Equity Definitions, such amount shall be
deemed to be zero. |
| (y) | Other
Adjustments Pursuant to the Equity Definitions. Notwithstanding anything to the
contrary in this Confirmation, solely for the purpose of adjusting the Cap Price, the
terms “Potential Adjustment Event,” “Merger Event,” and “Tender
Offer” shall each have the meanings assigned to such term in the Equity Definitions
(as amended by Section 10(j)(i) or, if applicable, by the definition of “Announcement
Event”); provided that upon the occurrence of a Merger Date, the occurrence
of a Tender Offer Date, or declaration by Counterparty of the terms of any Potential
Adjustment Event, respectively, as such terms are defined in the Equity Definitions,
the Calculation Agent shall determine in a commercially reasonable manner whether such
occurrence or declaration, as applicable, has had a material economic effect on the Transactions
and, if so, shall adjust the Cap Price to preserve the fair value of the Options (including
adjustments to account for changes in volatility, expected dividends, stock loan rate
or liquidity relative to the relevant Shares as determined by the Calculation Agent in
a commercially reasonable manner, but, for the avoidance of doubt, solely in the case
of Section 11.2(e)(i), (ii)(A) and (iv), no adjustments will be made to account for changes
in volatility, expected dividends, stock loan rate or liquidity relative to the relevant
Shares); provided that in no event shall the Cap Price be less than the Strike
Price; provided further that, if no adjustment to the Cap Price will preserve
such fair value of the Options, Cancellation and Payment will be deemed to apply and
any payment to be made by one party to the other shall be calculated in accordance with
Section 12.7 of the Equity Definitions, and the Calculation Agent shall determine the
amount of such payment as if “Calculation Agent Determination” applied to
the Option Transaction; provided further that any adjustment to the Cap Price
made pursuant to this Section 10(y) shall be made without duplication of any other
adjustment hereunder (including, for the avoidance of doubt, adjustment made pursuant
to the provisions opposite the captions “Method of Adjustment,” “Consequences
of Merger Events / Tender Offers” and “Consequence of Announcement Events”
in Section 3 above and pursuant to Section 10(h) above); provided further
that any Share repurchases by Counterparty, whether pursuant to Rule 10b-18 of the Exchange
Act, Rule 10b5-1 of the Exchange Act or pursuant to forward contracts or accelerated
stock repurchase contracts or similar derivatives transactions on customary terms, at
prevailing market prices, volume-average weighted prices or discounts thereto shall not
be considered Potential Adjustment Events, to the extent that (A) the aggregate number
of Shares so repurchased during the term of the Transaction would not exceed 25% of the
number of Shares outstanding as of the Trade Date and (B) the aggregate number of Shares
so repurchased during any calendar year would not exceed 15% of the number of Shares
outstanding as of the Trade Date, in each case as determined by Calculation Agent. Solely
for purposes of this Section 10(y), “Extraordinary Dividend” means any cash
dividend on the Shares other than a regular, quarterly cash dividend in an amount equal
to the Regular Dividend. |
| (z) | [Conduct
Rules. 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. |
16
Insert for Base Call Option Confirmation.
17
Insert for Additional Call Option Confirmation.
| (aa) | Risk
Disclosure Statement. Counterparty represents and warrants that it has received,
read and understands the OTC Options Risk Disclosure Statement provided by Dealer and
a copy of the most recent disclosure pamphlet prepared by The Options Clearing Corporation
entitled “Characteristics and Risks of Standardized Options”.]18 |
| (bb) | Delivery
of Tax Certificates. For purposes of Section 4(a)(i) and (ii) of the Agreement,
Counterparty shall have delivered to Dealer a properly completed Internal Revenue Service
Form W-9 (or successor thereto) and Dealer agrees to deliver to Counterparty a complete
and duly executed Internal Revenue Service Form W-[9][8ECI] (or successor thereto). Such
forms shall be delivered (i) upon execution and delivery of this Confirmation, (ii) upon
reasonable request by the other party and (iii) promptly upon learning that any such
tax form previously provided by it has become obsolete or incorrect. |
| (cc) | Withholding
Tax Imposed on Payments to Non-U.S. Counterparties under the United States Foreign Account
Tax Compliance Act. “Indemnifiable Tax”, as defined in Section 14
of the Agreement, shall not include any U.S. federal withholding tax imposed or collected
pursuant to FATCA (a “FATCA Withholding Tax”). “FATCA”
is defined as Sections 1471 through 1474 of the Code, any current or future regulations
or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)
of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant
to any intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code. For the avoidance of doubt, a FATCA Withholding Tax is
a Tax the deduction or withholding of which is required by applicable law for the purposes
of Section 2(d) of the Agreement. |
| (dd) | Incorporation
of ISDA 2015 Section 871(m) Protocol Provisions. To the extent that either party
to the Agreement with respect to this Transaction is not an adhering party to the ISDA
2015 Section 871(m) Protocol published by the International Swaps and Derivatives Association,
Inc. on November 2, 2015 and available at xxx.xxxx.xxx, as may be amended, supplemented,
replaced or superseded from time to time (the “871(m) Protocol”),
the parties agree that the provisions and amendments contained in the Attachment to the
871(m) Protocol are incorporated into and apply to the Agreement with respect to this
Transaction as if set forth in full herein. The parties further agree that, solely for
purposes of applying such provisions and amendments to the Agreement with respect to
this Transaction, references to “each Covered Master Agreement” in the 871(m)
Protocol will be deemed to be references to the Agreement with respect to this Transaction,
and references to the “Implementation Date” in the 871(m) Protocol will be
deemed to be references to the Trade Date of this Transaction. |
| (ee) | Payee
Tax Representations. For purposes of Section 3(f) of the Agreement, each party
makes the following representations, as applicable: |
Counterparty
represents that it is a “U.S. person” (as that term is used in Section 1.1441-4(a)(3)(ii) of United States Treasury
Regulations), a corporation for U.S. federal income tax purposes and an exempt recipient under Section 1.6049-4(c)(l)(ii) of the
United States Treasury Regulations.
[Dealer
represents that it is a “U.S. person” (as that term is used in Section 1.1441-4(a)(3)(ii) of United States Treasury
Regulations) for U.S. federal income tax purposes and an exempt recipient under Section 1.6049-4(c)(l)(ii) of the United States
Treasury Regulations.] [OR] [Dealer represents that it is a is a “foreign person” (as that term is used in Section
1.6041-4(a)(4) of the United States Treasury Regulations) for U.S. federal income tax purposes and that each payment received
or to be received by it will be effectively connected with its conduct of a trade or business in the United States.]
| (ff) | [Dealer
boilerplate, including QFC boilerplate] |
18
To be included if applicable.
Counterparty
hereby agrees to check this Confirmation and to confirm that the foregoing correctly sets forth the terms of the Transaction by
signing in the space provided below and returning to Dealer the fully executed Confirmation via e-mail.
| |
|
|
Very truly yours, |
| |
|
|
|
|
| |
|
|
|
[Dealer] |
| |
|
|
|
|
| |
|
|
By: |
|
| |
|
|
Authorized Signatory |
| |
|
|
Name: |
| |
|
|
|
|
Accepted and confirmed
as of the Trade Date: |
|
|
|
| |
|
|
|
|
| Progress Software Corporation |
|
|
|
| |
|
|
|
|
| By: |
|
|
|
|
| Authorized Signatory |
|
|
|
| Name: |
|
|
|
