MORGAN STANLEY
MORGAN STANLEY & CO. LLC
1585 BROADWAY
NEW YORK, NY  10036-8293
(212) 761-4000

August 14, 2014

Fixed Dollar Accelerated Share Repurchase Transaction

PTC Inc.
140 Kendrick Street
Needham, MA 02494
___________________________________________________________________________________

Dear Sir/Madam:

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the Transaction entered into between Morgan Stanley &
Co. LLC (“MSCO”) and PTC Inc. (“Issuer”) on the Trade Date specified below (the
“Transaction”).  This confirmation constitutes a “Confirmation” as referred to
in the Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (as published by the International Swaps and Derivatives
Association, Inc. (“ISDA”)) (the “Equity Definitions”) are incorporated into
this Confirmation.  The Transaction is a Share Forward Transaction for purposes
of the Equity Definitions.  Any reference to a currency shall have the meaning
contained in Section 1.7 of the 2006 ISDA Definitions, as published by ISDA.

1.  This Confirmation evidences a complete and binding agreement between MSCO
and Issuer as to the terms of the Transaction to which this Confirmation relates
and shall supersede all prior or contemporaneous written or oral communications
with respect thereto.  This Confirmation shall be subject to an agreement (the
“Agreement”) in the form of the 2002 ISDA Master Agreement as if MSCO and Issuer
had executed an agreement in such form without any Schedule but with the
elections set forth in this Confirmation (and the election of USD as the
Termination Currency).

The Transaction shall be the only transaction under the Agreement.  If there
exists any ISDA Master Agreement between MSCO and Issuer or any confirmation or
other agreement between MSCO and Issuer pursuant to which an ISDA Master
Agreement is deemed to exist between MSCO and Issuer, then, notwithstanding
anything to the contrary in such ISDA Master Agreement, such confirmation or
agreement or any other agreement to which MSCO and Issuer are parties, the
Transaction shall not be considered a transaction under, or otherwise governed
by, such existing or deemed to be existing ISDA Master Agreement.

If there is any inconsistency between the Agreement, this Confirmation and the
Equity Definitions, the following will prevail for purposes of the Transaction
in the order of precedence indicated: (i) this Confirmation; (ii) the Equity
Definitions; and (iii) the Agreement.

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

GENERAL TERMS:

Trade Date:
As specified in Schedule I

Buyer:
Issuer

 

 
 
 

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Seller:
MSCO

Shares:
Common Stock, par value USD 0.01 per share, of Issuer (Ticker: PTC)

   

Forward Price:
A price per Share (as determined by the Calculation Agent) equal to (i) the
arithmetic mean (not a weighted average) of the 10b-18 VWAP on each Trading Day
during the Calculation Period minus (ii) the Discount.
   
Discount:
As specified in Schedule I
                   
10b-18 VWAP:
On any Trading Day, a price per Share equal to the volume-weighted average price
of the Rule 10b-18 eligible trades in the Shares for the entirety of such
Trading Day as determined by the Calculation Agent by reference to the screen
entitled “PTC <Equity> AQR SEC” or any successor page as reported by Bloomberg
L.P. or any successor (without regard to pre-open or after-hours trading outside
of any regular trading session for such Trading Day or block trades (as defined
in Rule 10b-18(b)(5) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) on such Trading Day) or, if the price displayed on such screen
is clearly erroneous, as determined by the Calculation Agent in good faith and
in a commercially reasonable manner
       

Calculation Period:
The period from, and including, the first Trading Day that occurs on or after
the Prepayment Date to, but excluding, the relevant Valuation Date; provided,
however, that if the Valuation Date is the Scheduled Valuation Date, then the
Valuation Date shall be included in the Calculation Period.

Trading Day:
Any Exchange Business Day that is not a Disrupted Day in whole

Initial Shares:
As specified in Schedule I
   
Initial Share Delivery Date:
One Exchange Business Day following the Trade Date.  On the Initial Share
Delivery Date, Seller shall deliver to Buyer a number of Shares equal to the
Initial Shares in accordance with Section 9.4 of the Equity Definitions, with
the Initial Share Delivery Date being deemed to be a “Settlement Date” for
purposes of such Section 9.4.

Prepayment:
Applicable

 
 
 
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Prepayment Amount:
As specified in Schedule I
   
Commission Amount:
As specified in Schedule I
   
Adjustment Amount:
As specified in Schedule I
   
Structuring Fee:
As specified in Schedule I

Prepayment Date:
One Exchange Business Day following the Trade Date.  On the Prepayment Date,
Buyer shall pay to Seller the Prepayment Amount, the Commission Amount, the
Adjustment Amount and the Structuring Fee.

Exchange:
NASDAQ

Related Exchange:
All Exchanges

Market Disruption Event:
The definition of “Market Disruption Event” in Section 6.3(a) of the Equity
Definitions is hereby amended by deleting the words “at any time during the
one-hour period that ends at the relevant Valuation Time, Latest Exercise Time,
Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,”
starting in the third line thereof.
 
Section 6.3(d) of the Equity Definitions is hereby amended by deleting the
remainder of the provision following the term “Scheduled Closing Time” in the
fourth line thereof.
 
Notwithstanding anything to the contrary in the Equity Definitions, if any
Exchange Business Day in the  Calculation Period is a Disrupted Day, the
Calculation Agent shall have the option in its good faith and commercially
reasonable discretion to take one or more of the following actions: (i)
determine that such Exchange Business Day is a Disrupted Day in part, in which
case the Calculation Agent shall (x) determine the 10b-18 VWAP on such Exchange
Business Day based on Rule 10b-18 eligible trades in the Shares on such day
taking into account the nature and duration of the relevant Market Disruption
Event and the volume, historical trading patterns and price of the Shares and
(y) determine the  Forward Price using an appropriately weighted average of
10b-18 VWAPs instead of an arithmetic mean, and/or (ii) elect to postpone the
Scheduled Valuation Date by up to one Scheduled Trading Day for every Trading
Day that is a Disrupted Day during the Calculation Period.  For the avoidance of
doubt, if the Calculation Agent takes the action described in clause (i) above,
then such Disrupted Day shall be a Trading Day for purposes of calculating
the  Forward Price.
 
Any Exchange Business Day on which, as of the date hereof, the Exchange is
scheduled to close prior to its normal close of trading shall be deemed not to
be an Exchange Business Day;

 
 
 
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   if a closure of the Exchange prior to its normal close of trading on any
Exchange Business Day is scheduled following the date hereof, then such Exchange
Business Day shall be deemed to be a Disrupted Day in full.
 
If a Disrupted Day occurs during the Calculation Period and each of the nine
immediately following Scheduled Trading Days is a Disrupted Day, then the
Calculation Agent may, in its good faith and commercially reasonable discretion,
deem such ninth Scheduled Trading Day to be an Exchange Business Day that is not
a Disrupted Day and determine the volume-weighted average price of the Rule
10b-18 eligible trades in the Shares for such ninth Scheduled Trading Day using
its good faith and commercially reasonable estimate of the value of the Shares
on such ninth Scheduled Trading Day based on the volume, historical trading
patterns and price of the Shares and such other factors as it deems appropriate.

 
VALUATION:

Valuation Date:
The earlier of (i) the Scheduled Valuation Date and (ii) any earlier accelerated
Valuation Date as a result of MSCO’s election in accordance with the immediately
succeeding paragraph.
 
MSCO shall have the right, in its absolute discretion but subject to the
limitation set forth in the immediately succeeding paragraph, to accelerate the
Valuation Date, in whole or in part, to any Exchange Business Day that is on or
after the Lock-Out Date and prior to the Scheduled Valuation Date by notice
(each such notice, an “Acceleration Notice”) to Issuer by 9:00 p.m., New York
City time, on the Valuation Date.
 
MSCO shall specify in each Acceleration Notice the portion of the Prepayment
Amount that is subject to acceleration (which may be less than the full
Prepayment Amount, but only so long as such portion is not less than USD
125,000,000).  If the portion of the Prepayment Amount that is subject to
acceleration is less than the full Prepayment Amount, then the Calculation Agent
shall adjust the terms of the Transaction as appropriate in order to take into
account the occurrence of such accelerated Valuation Date (including cumulative
adjustments to take into account all prior accelerated Valuation Dates).
 
On each Valuation Date, the Calculation Agent shall calculate the Settlement
Amount.
   
Scheduled Valuation Date:
As specified in Schedule I, subject to postponement in accordance with “Market
Disruption Event” above
   
Lock-Out Date:
As specified in Schedule I
   

 
 
 
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SETTLEMENT TERMS:

Physical Settlement:
 
 
 
Applicable.
 
On the Settlement Date, Seller shall deliver to Buyer a number of Shares equal
to (a) (i) the Prepayment Amount  divided by (ii) the Forward Price, minus (b)
the Initial Shares (such number of Shares, the “Settlement Amount”), rounded to
the nearest whole number of Shares; provided, however, that if the Settlement
Amount is less than zero, then Buyer shall deliver to Seller a number of Shares
equal to 102% of the absolute value of the Settlement Amount (such number of
Shares, the “Payment Shares”).
 
Notwithstanding the proviso above, if the Settlement Amount is less than zero,
Buyer may cash settle its obligation to deliver the Payment Shares by delivering
to Seller a notice by no later than the Valuation Date (or, if later, the date
on which MSCO delivers an Acceleration Notice) electing to cash settle its
obligation to deliver the Payment Shares.  Any such cash settlement shall be
effected in accordance with “Cash Settlement of Payment Shares” below.

Settlement Currency:
USD
   
Settlement Date:
The date that falls one Settlement Cycle after the relevant Valuation Date
   
Cash Settlement of Payment Shares:
If Buyer elects to cash settle its obligation to deliver Payment Shares, then on
the Valuation Date a notional Share balance (the “Settlement Balance”) shall be
created with an initial balance equal to the absolute value of the Settlement
Amount.  On the Settlement Date, Buyer shall deliver to Seller an amount in USD
equal to the Payment Shares multiplied by a price per Share as reasonably
determined by the Calculation Agent (such cash amount, the “Initial Cash
Settlement Amount”).  On the Exchange Business Day immediately following the
Valuation Date, Seller may begin purchasing Shares in a commercially reasonable
manner (all such Shares purchased, “Cash Settlement Shares”) and a notional cash
balance (the “Cash Balance”) shall be created with an initial balance equal to
the Initial Cash Settlement Amount.  At the end of each Exchange Business Day on
which Seller purchases Cash Settlement Shares, Seller shall reduce (i) the
Settlement Balance by the number of Cash Settlement Shares purchased on such
Exchange Business Day and (ii) the Cash Balance by the aggregate purchase price
(including commissions) of the Cash Settlement Shares purchased on such Exchange
Business Day.  If, on any Exchange Business Day, the Cash Balance is reduced to
or below zero but the Settlement Balance is greater than zero, the Buyer shall
(i) deliver to Seller or as directed by Seller on the next Currency Business Day
after such Exchange Business Day an additional amount in USD (an “Additional
Cash Settlement
 

 
 
 
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Amount”) equal to the Settlement Balance as of such Exchange Business Day
multiplied by a price per Share as reasonably determined by the Calculation
Agent, and the Cash Balance shall be increased by such amount.  This provision
shall be applied successively until the Settlement Balance is reduced to
zero.  On the Currency Business Day immediately following the Exchange Business
Day that the Settlement Balance is reduced to zero, Seller shall return to Buyer
an amount in USD equal to the remaining Cash Balance, if any, as of such
Exchange Business Day.  In making any purchases of Cash Settlement Shares
contemplated by this paragraph, MSCO shall use commercially reasonable efforts
to purchase such Shares in a manner that would qualify for the safe harbor
provided by Rule 10b-18 under the Exchange Act (“Rule 10b-18”) if such purchases
were made by or on behalf of Issuer.  The period until the Settlement Balance is
reduced to zero shall be considered to be part of the Calculation Period for
purposes of the representations, warranties and covenants and other provisions
herein as the context requires (but, for the avoidance of doubt, not for
purposes of determining the Forward Price).
 
Other Applicable Provisions:
The last sentence of Section 9.2, Sections 9.8, 9.9, 9.10 and 9.11 (except that
the Representation and Agreement contained in Section 9.11 of the Equity
Definitions shall be modified by excluding any representations therein relating
to restrictions, obligations, limitations or requirements under applicable
securities laws arising as a result of the fact that Buyer is the issuer of the
Shares) and Section 9.12 of the Equity Definitions will be applicable to the
Transaction.

SHARE ADJUSTMENTS:

Potential Adjustment Event:
Notwithstanding anything to the contrary in Section 11.2(e) of the Equity
Definitions, an Extraordinary Dividend shall not constitute a Potential
Adjustment Event.
 
It shall constitute a Potential Adjustment Event if a Disrupted Day occurs or,
pursuant to Section 11 below, is deemed to occur (in whole or in part) on any
Trading Day on or prior to the Valuation Date.
   
Extraordinary Dividend:
Any dividend or distribution on the Shares with an ex-dividend date occurring
during the period from, and including, the Trade Date to, and including, the
last day of the Calculation Period (other than any dividend or distribution of
the type described in Section 11.2(e)(i), Section 11.2(e)(ii)(A) or Section
11.2(e)(ii)(B) of the Equity Definitions).

Method of Adjustment:
Calculation Agent Adjustment

EXTRAORDINARY EVENTS:
 

 
 
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Consequences of Merger Events:

Share-for-Share:
Modified Calculation Agent Adjustment

Share-for-Other:
Cancellation and Payment on that portion of the Other Consideration that
consists of cash; Modified Calculation Agent Adjustment on the remainder of the
Other Consideration

Share-for-Combined:
Component Adjustment
   
Tender Offer:
Applicable; provided that Section 12.1(d) of the Equity
Definitions is hereby amended by replacing “10%” with
“20%” in the third line thereof.

Consequences of Tender Offers:

Share-for-Share:
Modified Calculation Agent Adjustment

Share-for-Other:
Modified Calculation Agent Adjustment

Share-for-Combined:
Modified Calculation Agent Adjustment
   
New Shares:
In the definition of New Shares in Section 12.1(i) of the Equity Definitions,
the text in clause (i) thereof shall be deleted in its entirety (including the
word “and” following such clause (i)) and replaced with “publicly quoted, traded
or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market
or The NASDAQ Global Market (or their respective successors)”.

For purposes of the Transaction,

 
(i)
the definition of Merger Date in Section 12.1(c) of the Equity Definitions shall
be amended to read, “Merger Date shall mean the Announcement Date.”;

 
(ii)
the definition of Tender Offer Date in Section 12.1(e) of the Equity Definitions
shall be amended to read, “Tender Offer Date shall mean the Announcement Date.”;

 
(iii)
the definition of “Announcement Date” in Section 12.1(l) of the Equity
Definitions is hereby amended by (a) replacing the words “a firm” with the word
“any” in the second and fourth lines thereof, (b) replacing the word “leads to
the” with the words “, if completed, would lead to a” in the third and the fifth
lines thereof, (c) replacing the words “voting shares” with the word “Shares” in
the fifth line thereof, (d) inserting the words “by any entity” after the word
“announcement” in the second and the fourth lines thereof, (e) inserting the
words “or to explore the possibility of engaging in” after the words “engage in”
in the second line thereof and (f) inserting the words “or to explore the
possibility of purchasing or otherwise obtaining” after the word “obtain” in the
fourth line thereof; and

 
(iv)
Section 12.2 of the Equity Definitions is hereby amended by inserting the words
“Announcement Date in respect of any Merger Event or any potential” before the
words “Merger Event” in the final line thereof.

Composition of Combined
Consideration:                                                                                     Not
Applicable
 

 
 
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Nationalization, Insolvency or Delisting:
Cancellation and Payment; provided that in addition to the provisions of Section
12.6(a)(iii) of the Equity Definitions, it shall 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 Market or The NASDAQ Global Select Market (or their respective
successors); if the Shares are immediately re-listed, re-traded or re-quoted on
any such exchange or quotation system, such exchange or quotation system shall
thereafter be deemed to be the Exchange.

Additional Disruption Events:

Change in Law:
Applicable; provided that (i) any determination as to whether (A) the adoption
of or any change in any applicable law or regulation (including, for the
avoidance of doubt and without limitation, (x) any tax law or (y) adoption or
promulgation of new regulations authorized or mandated by existing statute) or
(B) the promulgation of or any change in the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any applicable
law or regulation (including any action taken by a taxing authority), in each
case, constitutes a “Change in Law” shall be made without regard to Section 739
of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any
similar legal certainty provision in any legislation enacted, or rule or
regulation promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii)
of the Equity Definitions is hereby amended by replacing the parenthetical
beginning after the word “regulation” in the second line thereof the words
“(including, for the avoidance of doubt and without limitation, (x) any tax law
or (y) adoption or promulgation of new regulations authorized or mandated by
existing statute)”.

Failure to Deliver:
Applicable

Insolvency Filing:
Applicable

Hedging Disruption:
Applicable

Increased Cost of Hedging:
Applicable
   
Loss of Stock Borrow:
Applicable
   
Maximum Stock Loan Rate:
1200 bps

Increased Cost of Stock Borrow:
Applicable
   
Initial Stock Loan Rate:
33 bps

Determining Party:
For all applicable events, MSCO; provided that when making any determination or
calculation as “Determining Party,”

 
 
 
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   MSCO 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 the
Confirmation as if the Determining Party were the Calculation Agent.

Hedging Party:
For all applicable events, MSCO;.

Non-Reliance:
Applicable

Agreements and Acknowledgements Regarding Hedging Activities:
 
Applicable

Additional Acknowledgments:
Applicable

3.  Calculation Agent:
MSCO; provided that following any determination or calculation hereunder, upon a
written request by Issuer, the Calculation Agent will promptly provide to
Issuer, by email to the email address provide by Issuer 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, it being understood that the Calculation Agent
shall not be obligated to disclose any proprietary models or other confidential
information used by it for such determination or calculation.

4.  Account Details and Notices:

(a)           Account for delivery of Shares to Issuer:
American Stock Transfer & Trust Company, LLC
Transfer Agent #2941

(b)           Account for payments to Issuer:

Bank:           Wells Fargo Bank, NA
ABA:           121000248
Acct:           PTC Inc.
No:           2079900121445
 
 

(c)           Account for payments to MSCO:

Citibank, NY
ABA 021000089
Acct Name:  Morgan Stanley & Co.
Acct No:  38890774
PTC Inc.
Account # 023-05260

(d)           For purposes of this Confirmation:

(i)           Address for notices or communications to Issuer:
Mr. Steve Bouchard, SVP Tax, Treasurer
PTC Inc.
140 Kendrick Street
 
 
 
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Needham, MA 02494
(ii)           Address for notices or communications to MSCO:

Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036-8293
Attention: David Oakes
Telephone: (212) 761-5319
Facsimile: 212-404-9480

With a copy to:
Morgan Stanley & Co. LLC
1585 Broadway
4th Floor
New York, NY 10036
Attention: Joshua Birbach
Telephone: 212-761-1719
Facsimile: 212-507-8717
Email: Joshua.birbach@morganstanley.com

5.  Amendments to the Equity Definitions.

(a)           Section 9.2(a)(iii) of the Equity Definitions is hereby amended by
deleting the words “the Excess Dividend Amount, if any, and”.

(b)           Section 11.2(a) of the Equity Definitions is hereby amended by
deleting the words “a diluting or concentrative effect on the theoretical value
of the relevant Shares” and replacing them with the words “a material economic
effect on the relevant Transaction”.

(c)           The first sentence of Section 11.2(c) of the Equity Definitions,
prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If
“Calculation Agent Adjustment” is specified as the Method of Adjustment in the
related Confirmation of a Share Option Transaction or Share Forward Transaction,
then, following the announcement or occurrence of any Potential Adjustment
Event, the Calculation Agent will determine whether such Potential Adjustment
Event has a material economic effect on the Transaction and, if so, will (i)
make appropriate adjustment(s), if any, to any one or more of:’ and the portion
of such sentence immediately preceding clause (ii) thereof is hereby amended by
deleting the words “diluting or concentrative” and the words “(provided that no
adjustments will be made to account solely for changes in volatility, expected
dividends, stock loan rate or liquidity relative to the relevant Share)” and
replacing such latter phrase with the words “(including adjustments to account
for changes in volatility, stock loan rate or liquidity relevant to the Shares
or to the Transaction)”.

(d)           Section 11.2(e)(vii) of the Equity Definitions is hereby amended
by deleting the words “diluting or concentrative effect on the theoretical value
of the relevant Shares” and replacing them with the words “material economic
effect on the relevant Transaction”.

(e)           Section 12.6(c)(ii) of the Equity Definitions is hereby amended by
replacing the words “the Transaction will be cancelled,” in the first line with
the words “MSCO will have the right to cancel the Transaction,”.

(f)           Section 12.9(b)(iv) of the Equity Definitions is hereby amended by
(A) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)”
following subsection (A) and (3) the phrase “in each case” in subsection (B);
and (B) deleting the phrase “neither the Non-Hedging Party nor the Lending Party
lends Shares in the amount of the Hedging Shares or” in the penultimate
sentence.
 

 
 
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(g)           Section 12.9(b)(v) of the Equity Definitions is hereby amended by
(A) adding the word “or” immediately before subsection “(B)” and deleting the
comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its
entirety, (2) deleting the word “or” immediately preceding subsection (C) and
(3) replacing in the penultimate sentence the words “either party” with “the
Hedging Party” and (4) deleting clause (X) in the final sentence.

6.  Certain Payments and Deliveries by MSCO.
 
Notwithstanding anything to the contrary herein, or in the Equity Definitions,
if at any time (i) an Early Termination Date occurs and MSCO would be required
to make a payment pursuant to Section 6 of the Agreement or (ii) an
Extraordinary Event occurs and MSCO would be required to make a payment pursuant
to Article 12 of the Equity Definitions (the amount of any such payment
obligation described in Section 6(i) or (ii) above, an “MSCO Payment Amount”),
then Issuer shall have the right, by prior written notice to MSCO, to require
MSCO to settle such payment obligation in Shares in lieu of cash; provided,
however, that Issuer shall not have the right to so elect in the event of (i) an
Insolvency, a Nationalization, a Merger Event or a Tender Offer, in each case,
in which the consideration or proceeds to be paid to holders of Shares consists
solely of cash or (ii) an Event of Default in which Issuer is the Defaulting
Party or a Termination Event in which Issuer is an Affected Party, which Event
of Default or Termination Event resulted from an event or events within Issuer’s
control.  If Issuer does not so elect for MSCO to settle an MSCO Payment Amount
in Shares, then MSCO shall have the right, in its sole discretion, to elect to
settle such MSCO Payment Amount in Shares.  If either Issuer or MSCO so elects,
then MSCO shall deliver to Issuer, on or within a commercially reasonable time
following the date on which such MSCO Payment Amount would have been due, a
number of Shares with a market value, as determined by the Calculation Agent,
equal to all or a portion (which portion may be zero) of the MSCO Payment
Amount.  If the market value of such Shares equals a portion, but not all, of
the MSCO Payment Amount, then, on the date such MSCO Payment Amount is due, a
notional balance (the “Settlement Balance”) shall be established equal to the
remaining portion of the MSCO Payment Amount, and MSCO shall commence purchasing
Shares for delivery to Issuer.  At the end of each Trading Day on which MSCO
purchases Shares pursuant to this Section 6, MSCO shall reduce the Settlement
Balance by the amount paid by MSCO to purchase the Shares purchased on such
Trading Day.  MSCO shall deliver any Shares purchased on a Trading Day pursuant
to this Section 6 to Issuer on the third Exchange Business Day following such
Trading Day.  MSCO shall continue so purchasing and delivering Shares until the
Settlement Balance has been reduced to zero.  In making any purchases of Shares
contemplated by this Section 6, MSCO shall use commercially reasonable efforts
to purchase such Shares in a manner that would qualify for the safe harbor
provided by Rule 10b-18 under the Exchange Act (“Rule 10b-18”) if such purchases
were made by or on behalf of Issuer.  The period until the Settlement Balance is
reduced to zero shall be considered to be part of the Calculation Period for
purposes of the representations, warranties and covenants and other provisions
herein as the context requires.

7.  Certain Payments and Deliveries by Issuer.

Notwithstanding anything to the contrary herein, or in the Equity Definitions,
if at any time (i) an Early Termination Date occurs and Issuer would be required
to make a payment pursuant to Section 6 of the Agreement or (ii) an
Extraordinary Event occurs and Issuer would be required to make a payment
pursuant to Article 12 of the Equity Definitions (any such payment described in
Section 7(i) or (ii) above, an “Early Settlement Payment”), then Issuer shall
have the right, by prior written notice to MSCO, in lieu of making such cash
payment, to settle such payment obligation in Shares (such Shares, “Early
Settlement Shares”); provided, however, that Issuer shall not have the right to
so elect in the event of (i) an Insolvency, a Nationalization, a Merger Event or
a Tender Offer, in each case, in which the consideration or proceeds to be paid
to holders of Shares consists solely of cash or (ii) an Event of Default in
which Issuer is the Defaulting Party or a Termination Event in which Issuer is
an Affected Party, which Event of Default or Termination Event resulted from an
event or events within Issuer’s control.  In order to elect to deliver Early
Settlement Shares, (i) Issuer must notify MSCO of its election by no later than
4:00 p.m., New York City time, on the date that is three Exchange Business Days
before the date that the Early Settlement Payment is due, (ii) Issuer must
specify whether such Early Settlement Shares are to be sold by means of a
registered offering or by means of a
 
 
 
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private placement and (iii) Issuer must comply with Section 8 below.  If Issuer
fails to give the notice described in clause (i) of the preceding sentence by
the deadline specified in such clause, such Early Settlement Shares shall be
deemed to be sold by means of a private placement.

8.  Provisions Relating to Delivery of Early Settlement Shares.

(a)           Issuer may deliver Early Settlement Shares and Make-Whole Shares
(as defined below) by means of a registered offering only if the following
conditions are satisfied:

(i)           On the later of (A) the Trading Day following Issuer’s election to
deliver Early Settlement Shares and any Make-Whole Shares by means of a
registered offering (the “Registration Notice Date”), and (B) the date on which
the Registration Statement is declared effective by the SEC or becomes
effective, but in no event later than the date the Early Settlement Payment is
due, Issuer shall deliver to MSCO a number of Early Settlement Shares equal to
the quotient of (I) the relevant Early Settlement Payment divided by (II) a
price per Share as reasonably determined by the Calculation Agent (the date of
such delivery, the “Registered Share Delivery Date”).

(ii)           Promptly following the Registration Notice Date, Issuer shall
file with the SEC a registration statement (“Registration Statement”) covering
the public sale by MSCO of the Early Settlement Shares and any Make-Whole Shares
(collectively, the “Registered Securities”) on a continuous or delayed basis
pursuant to Rule 415 (or any similar or successor rule), if available, under the
Securities Act of 1933, as amended (the “Securities Act”); provided that no such
filing shall be required pursuant to this paragraph (ii) if Issuer shall have
filed a similar registration statement with unused capacity at least equal to
the relevant Early Settlement Payment and such registration statement has become
effective or been declared effective by the SEC on or prior to the Registration
Notice Date and no stop order is in effect with respect to such registration
statement as of the Registration Notice Date, in which case such registration
statement shall be the Registration Statement.  Issuer shall use its
commercially reasonable efforts to file the Registration Statement as an
automatic shelf registration statement or have the Registration Statement
declared effective by the SEC as promptly as possible.  The Registration
Statement shall be effective and subject to no stop order as of the Registered
Share Delivery Date.

(iii)           Promptly following the Registration Notice Date, Issuer shall
afford MSCO a reasonable opportunity to conduct a due diligence investigation
with respect to Issuer customary in scope for underwritten offerings of equity
securities of similar size (including, without limitation, the availability of
senior management to respond to questions regarding the business and financial
condition of Issuer and the right to have made available to MSCO for inspection
all financial and other records, pertinent corporate documents and other
information reasonably requested by MSCO), and MSCO shall be satisfied in all
material respects with the results of such due diligence investigation of
Issuer.  For the avoidance of doubt, Issuer shall not have the right to deliver
Shares pursuant to this Section 8(a) (and the conditions to delivery of Early
Settlement Shares specified in this Section 8(a) shall not be satisfied) unless
and until MSCO is satisfied in all material respects with the results of such
due diligence investigation of Issuer.

(iv)           From the effectiveness of the Registration Statement until all
Registered Securities have been sold by MSCO, Issuer shall, at the request of
MSCO, make available to MSCO a printed prospectus relating to the Registered
Securities in form and substance (including, without limitation, any sections
describing the plan of distribution) reasonably satisfactory to MSCO (a
“Prospectus”, which term shall include any prospectus supplement thereto), in
such quantities as MSCO shall reasonably request.

(v)           Issuer shall use its commercially reasonable efforts to avoid or
prevent the issuance of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
Prospectus and, if any such order is issued, to obtain the lifting thereof as
 
 
 
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soon thereafter as is practicably possible.  If the Registration Statement, the
Prospectus or any document incorporated therein by reference contains a
misstatement of a material fact or omits to state a material fact required to be
stated therein or necessary to make any statement therein not misleading, Issuer
shall as promptly as practicable file any required document and prepare and
furnish to MSCO a reasonable number of copies of such supplement or amendment
thereto as may be necessary so that the Prospectus, as thereafter delivered to
the purchasers of the Registered Securities, will not contain a misstatement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make any statement therein not misleading.

(vi)           On or prior to the Registered Share Delivery Date, Issuer shall
enter into an agreement (a “Transfer Agreement”) with MSCO (or any affiliate of
MSCO designated by MSCO) relating to the public sale of the Registered
Securities and substantially similar to underwriting agreements customary for
underwritten offerings of equity securities of similar size, in form and
substance reasonably satisfactory to MSCO (or such affiliate), which Transfer
Agreement shall (without limiting the foregoing) contain provisions
substantially similar to those contained in such underwriting agreements
relating to:

(A)           the indemnification of, and contribution in connection with the
liability of, MSCO and its affiliates,

(B)           the delivery to MSCO (or such affiliate) of customary letters and
opinions (including, without limitation, accountants’ comfort letters, opinions
relating to the due authorization, valid issuance and fully paid and
non-assessable nature of the Registered Securities and letters of counsel
relating to the lack of material misstatements and omissions in the Registration
Statement, the Prospectus and Issuer’s filings under the Exchange Act); and

(C)           the payment by Issuer of all fees and expenses in connection with
such resale, including all registration costs and all reasonable fees and
expenses of one counsel for MSCO (or such affiliate).

(vii)           On the Registered Share Delivery Date, a notional balance (the
“Early Settlement Balance”) shall be established with an initial balance equal
to the amount of the Early Settlement Payment.  Following the delivery of Early
Settlement Shares or any Make-Whole Shares, MSCO shall sell all such Early
Settlement Shares or Make-Whole Shares in a commercially reasonable manner.

(viii)           At the end of each day on which sales have been made pursuant
to paragraph 8(a)(vii) above, the Early Settlement Balance shall be (A) reduced
by an amount equal to the net proceeds to be received by MSCO upon settlement of
such sales, and (B) increased by an amount (as reasonably determined by the
Calculation Agent) equal to MSCO’s funding cost with respect to the Early
Settlement Balance as of the close of business on the day one Settlement Cycle
prior to such day.

(ix)           If, on any date, the Settlement Balance has been reduced to zero
but not all of the Early Settlement Shares have been sold, no additional Early
Settlement Shares shall be sold and MSCO shall promptly deliver to Issuer (A)
any remaining Early Settlement Shares and (B) if the Early Settlement Balance
has been reduced to an amount less than zero, an amount in cash equal to the
absolute value of the then-current Early Settlement Balance.

(x)            If, on any date, all of the Early Settlement Shares have been
sold and the Settlement Balance has not been reduced to zero, Issuer shall, at
its election, either pay the remaining Early Settlement Balance to MSCO in cash
or promptly deliver to MSCO an additional number of Shares (“Make-Whole Shares”)
equal to (A) the Settlement Balance as of such date divided by (B) a price per
Share as reasonably determined by the Calculation Agent, or, if Issuer so
elects, pay the remaining
 
 
 
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Early Settlement Balance to MSCO in cash.  This clause (x) shall be applied
successively until the Settlement Balance is reduced to zero.

(xi)           If at any time the number of Shares covered by the Registration
Statement is less than the number of Registered Securities required to be
delivered pursuant to this Section 8(a), Issuer shall, at the request of MSCO,
file additional registration statement(s) to register the sale of all Registered
Securities required to be delivered to MSCO.

(xii)           Issuer shall cooperate with MSCO and use its commercially
reasonable efforts to take any other action necessary to effect the intent of
the provisions set forth in this Section 8(a).

(xiii)           The provisions of Section 8(b) shall apply to any then-current
Early Settlement Balance if (i) on any given day, Issuer cannot satisfy any of
the conditions set forth in this Section 8(a) or (ii) for a period of at least
10 consecutive Exchange Business Days, MSCO has determined that it is
inadvisable to effect sales of Registered Securities, unless in either case
Issuer pays such then-current Early Settlement Balance to MSCO in cash pursuant
to the Registration Statement.

      (b)           If Issuer timely elects to deliver (i) Shares pursuant to
the “Physical Settlement” provision of this Confirmation, (ii)   Early
Settlement Shares or (iii) Make-Whole Shares by means of a private placement,
the following provisions shall apply:

          (i)           All Shares, Early Settlement Shares and Make-Whole
Shares shall be delivered to MSCO (or any affiliate of MSCO designated by MSCO)
pursuant to the exemption from the registration requirements of the Securities
Act provided by Section 4(a)(2) thereof.

(ii)            Issuer shall afford MSCO and any potential purchaser of any such
Shares from MSCO (or any affiliate of MSCO designated by MSCO) identified by
MSCO a commercially reasonable opportunity to conduct a due diligence
investigation with respect to Issuer customary in scope for private placements
of equity securities of similar size (including, without limitation, the right
to have made available to them for inspection all financial and other records,
pertinent corporate documents and other information reasonably requested by
them) and Issuer shall not disclose material non-public information in
connection with such due diligence investigation.
 
(iii)           Issuer shall enter into an agreement (a “Private Placement
Agreement”) with MSCO (or any affiliate of MSCO designated by MSCO) in
connection with the private placement of such Shares by Issuer to MSCO (or any
such affiliate) and the private resale of such Shares by MSCO (or any such
affiliate), substantially similar to private placement purchase agreements
customary for private placements of equity securities of similar size, in form
and substance commercially reasonably satisfactory to MSCO and Issuer, which
Private Placement Agreement shall include, without limitation, provisions
substantially similar to those contained in such private placement purchase
agreements relating to the indemnification of, and contribution in connection
with the liability of, MSCO and its affiliates, and shall provide for the
payment by Issuer of all fees and expenses in connection with such resale,
including all reasonable fees and expenses of one counsel for MSCO but not
including any underwriter or broker discounts and commissions, and shall contain
representations, warranties and agreements of Issuer and MSCO reasonably
necessary or advisable to establish and maintain the availability of an
exemption from the registration requirements of the Securities Act for such
resales.

(iv)           Issuer will use commercially reasonable efforts to not take or
cause to be taken any action that would make unavailable either (A) the
exemption set forth in Section 4(a)(2) of the Securities Act for the sale of
any, Shares, Early Settlement Shares or Make-Whole Shares by Issuer to MSCO or
(B) an exemption from the registration requirements of the Securities Act
reasonably acceptable to MSCO for resales of Shares, Early Settlement Shares and
Make-Whole Shares by MSCO.
 

 
 
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(v)            On the date requested by MSCO, Issuer shall deliver a number of
Early Settlement Shares equal to the quotient of (A) the amount of the Early
Settlement Payment divided by (B) a per Share value, determined by MSCO in a
commercially reasonable manner, which value shall take into account transfer
restrictions applicable to such Shares and may be based on indicative bids from
institutional “accredited investors” (as defined in Rule 501 under the
Securities Act), and the provisions of Section 8(a)(vii) through (x) shall apply
to the Early Settlement Shares delivered pursuant to this Section 8(b)(v).  For
purposes of applying the foregoing, the Registered Share Delivery Date referred
to in Section 8(a)(vii) shall be the date on which Issuer delivers the Early
Settlement Shares.

(c)           If Issuer elects to deliver Early Settlement Shares to settle its
obligation to make an Early Settlement Payment, then, if necessary, Issuer shall
use its commercially reasonable efforts to cause the number of authorized but
unissued Shares of Common Stock to be increased to an amount sufficient to
permit Issuer to fulfill its obligations under Sections 8(a) and/or 8(b) above.

9.  Special Provisions for Merger Transactions.

Notwithstanding anything to the contrary herein or in the Equity Definitions:

(a)           Issuer agrees that:

(i)           It will not during the term of the Transaction make, or, to the
extent within its control, permit to be made, any public announcement (as
defined in Rule 165(f) under the Securities Act) of any Merger Transaction or
potential Merger Transaction unless such public announcement is made prior to
the open or after the close of the regular trading session on the Exchange for
the Shares.

(ii)           To the extent that an announcement of a potential Merger
Transaction occurs during the term of the Transaction and such announcement does
not cause the Transaction to be cancelled or terminated in whole pursuant to
“Extraordinary Events” in Section 2 above, then as soon as practicable following
such announcement (but in any event prior to the next opening of the regular
trading session on the Exchange), Issuer shall provide MSCO with written notice
of such announcement; promptly (but in any event prior to the next opening of
the regular trading session on the Exchange), Issuer shall provide MSCO with
written notice specifying (x) Issuer’s average daily “Rule 10b-18 purchases” (as
defined in Rule 10b-18) during the three full calendar months immediately
preceding the Announcement Date that were not effected through MSCO or its
affiliates and (y) the number of Shares purchased pursuant to the block purchase
proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar
months preceding the Announcement Date.  Such written notice shall be deemed to
be a certification by Issuer to MSCO that such information is true and
correct.  Issuer understands that MSCO will use this information in calculating
the trading volume for purposes of Rule 10b-18.  In addition, Issuer shall
promptly notify MSCO of the earlier to occur of the completion of such
transaction and the completion of the vote by target shareholders.  Issuer
acknowledges that any such public announcement may trigger the provision set
forth in Section 11 below.  Accordingly, Issuer acknowledges that its actions in
relation to any such announcement or transaction must comply with the standards
set forth in Section 13(b) below.

(b)           Upon the occurrence of any such public announcement, MSCO in its
good faith discretion may (i) apply the provisions of Section 11 below and/or
(ii) treat the occurrence of such announcement as an Additional Termination
Event with respect to which the Transaction shall be the sole Affected
Transaction, Issuer shall be the sole Affected Party and MSCO shall be the party
entitled to designate an Early Termination Date pursuant to Section 6(b) of the
Agreement.

“Merger Transaction” means any merger, acquisition or similar transaction
involving a recapitalization of Issuer as contemplated by Rule 10b-18(a)(13)(iv)
under the Exchange Act.
 
 
 
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10.  Special Provisions for Acquisition Transaction Announcements.

(a)           If an Acquisition Transaction Announcement occurs on or prior to
the final Valuation Date, then the Forward Price shall be determined as if  the
words “minus (ii) the Discount” were deleted from the definition thereof. If an
Acquisition Transaction Announcement occurs after the Trade Date but prior to
the Lock-Out Date, the Lock-Out Date shall be deemed to be the date of such
Acquisition Transaction Announcement.

(b)           “Acquisition Transaction Announcement” means (i) the announcement
of an Acquisition Transaction, (ii) an announcement that Issuer or any of its
subsidiaries has entered into an agreement, a letter of intent or an
understanding designed to result in an Acquisition Transaction, (iii) the
announcement of the intention to solicit or enter into, or to explore strategic
alternatives or other similar undertaking that may include, an Acquisition
Transaction or (iv) any announcement subsequent to an Acquisition Transaction
Announcement relating to an amendment, extension, withdrawal or other change to
the subject matter of the previous Acquisition Transaction Announcement. For the
avoidance of doubt, the term “announcement” as used in the definition of
Acquisition Transaction Announcement refers to any public announcement whether
made by Issuer or a third party.

(c)           “Acquisition Transaction” means (i) any Merger Event (for purposes
of this definition, the definition of Merger Event shall be read with the
references therein to “100%” being replaced by “20%” and to “50%” by “75%” and
without reference to the clause beginning immediately following the definition
of Reverse Merger therein to the end of such definition), Tender Offer or Merger
Transaction or any other transaction involving the merger of Issuer with or into
any third party, (ii) the sale or transfer of all or substantially all of the
assets or liabilities of Issuer, (iii) a recapitalization, reclassification,
binding share exchange or other similar transaction, (iv) any acquisition,
lease, exchange, transfer, disposition (including by way of spin-off or
distribution) of assets or liabilities (including any capital stock or other
ownership interests in subsidiaries) or other similar event by Issuer or any of
its subsidiaries where the aggregate consideration transferable or receivable by
or to Issuer or its subsidiaries exceeds 20% of the market capitalization of
Issuer and (v) any transaction with respect to which Issuer or its board of
directors has a legal obligation to make a recommendation to its shareholders in
respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange
Act or otherwise).

11.  MSCO Adjustments.

In the event that MSCO reasonably determines based on the advice of counsel that
it is appropriate with regard to any legal, regulatory or self-regulatory
requirements or related policies and procedures (so long as such requirements,
policies and procedures are generally applicable to transactions similar to the
Transaction, and whether or not such requirements, policies or procedures are
imposed by law or have been voluntarily adopted by MSCO, and including, without
limitation, Rule 10b-18, Rule 10b-5, Regulations 13D-G and Regulations 14 D-E
under the Exchange Act), for MSCO to refrain from purchasing Shares or engaging
in other market activity or to purchase fewer than the number of Shares or to
engage in fewer or smaller other market transactions than MSCO would otherwise
purchase or engage in on any Trading Day on or prior to the last day of the
Calculation Period, then MSCO may, in its commercially reasonable discretion,
elect that a Market Disruption shall be deemed to have occurred on such Trading
Day.  For the avoidance of doubt, such Trading Day shall be treated as a
Disrupted Day in full for the purposes of Article 6 of the Equity
Definitions.  MSCO shall notify Issuer upon the exercise of MSCO’s rights
pursuant to this Section 11 and shall subsequently notify Issuer on the day MSCO
believes that the circumstances giving rise to such exercise have changed.

12.  Covenants.

Issuer covenants and agrees that:
 
 
 
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(a)           Until the end of the Potential Purchase Period (as defined below),
neither it nor any of its affiliated purchasers (as defined in Rule 10b-18 under
the Exchange Act) shall directly or indirectly (which shall be deemed to include
the writing or purchase of any cash-settled or other derivative or structured
Share repurchase transaction with a hedging period, calculation period or
settlement valuation period or similar period that overlaps with the
Transaction) purchase, offer to purchase, place any bid or limit order relating
to a purchase of or commence any tender offer relating to Shares (or any
security convertible into or exchangeable for Shares) without the prior written
approval of MSCO (other than (w) purchases of Shares that do not constitute
“Rule 10b-18 purchases” under subparagraphs (ii) or (iii) of Rule 10b-18(a)(13)
and that are not reasonably expected to result in purchases of Shares in the
market, (x) withholding of Shares from holders of employee stock options to
cover amounts payable (including tax liabilities and/or payment of exercise
price) in respect of the exercise of such employee stock options, (y) purchases
of Shares from employees to satisfy obligations under employee compensation
agreements with such employees and (z) privately negotiated off-exchange
repurchases of Shares that are not reasonably expected to result in purchases of
Shares in the market) or take any other action that would cause the purchase by
MSCO of any Shares in connection with this Agreement not to qualify for the safe
harbor provided in Rule 10b-18 under the Exchange Act (assuming for the purposes
of this paragraph that such safe harbor were otherwise available for such
purchases).  “Potential Purchase Period” means the period from, and including,
the Trade Date to, and including, the latest of (i) the last day of the
Calculation Period, (ii) the earlier of (A) the date ten Exchange Business Days
immediately following the last day of the Calculation Period and (B) the
Scheduled Valuation Date and (iii) if an Early Termination Date occurs or the
Transaction is cancelled pursuant to Article 12 of the Equity Definitions, a
date determined by MSCO in its commercially reasonable discretion and
communicated to Issuer no later than the Exchange Business Day immediately
following such date.

(b)           It will comply with all laws, rules and regulations applicable to
it (including, without limitation, the Securities Act and the Exchange Act) in
connection with the transactions contemplated by this Confirmation.

(c)           Without limiting the generality of Section 13.1 of the Equity
Definitions, it is not relying, and has not relied, upon MSCO or any of its
representatives or advisors with respect to the legal, accounting, tax or other
implications of this Agreement and that it has conducted its own analyses of the
legal, accounting, tax and other implications of this Agreement, and that MSCO
and its affiliates may from time to time effect transactions for their own
account or the account of customers and hold positions in securities or options
on securities of Issuer and that MSCO and its affiliates may continue to conduct
such transactions during the term of this Agreement.  Without limiting the
generality of the foregoing, Issuer acknowledges that MSCO is not making any
representations or warranties or taking any position or expressing any view with
respect to the treatment of the Transaction under any accounting standards
including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and
Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC
815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (or any
successor issue statements) or under FASB’s Liabilities & Equity Project.

(d)           Neither it nor any affiliates shall take any action that would
cause a restricted period (as defined in Regulation M under the Exchange Act
(“Regulation M”)) to be applicable to any purchases of Shares, or of any
security for which Shares is a reference security (as defined in Regulation M),
by Issuer or any affiliated purchasers (as defined in Regulation M) of Issuer
during the Potential Purchase Period unless Issuer has delivered written notice
to MSCO of the relevant restricted period (as defined in Regulation M) not later
than the Scheduled Trading Day immediately preceding the first day of such
restricted period, in which case an Additional Termination Event shall occur
with the Transaction as the sole Affected Transaction and Issuer as the sole
Affected Party and MSCO shall be the party entitled to designate an Early
Termination Date pursuant to Section 6(b) of the Agreement; Issuer acknowledges
that, in addition, delivery of any such notice may cause a Disrupted Day to
occur pursuant to Section 11 above.

(e)           It shall not declare or pay any Extraordinary Dividend until the
earlier of (i) the Scheduled Valuation Date or (ii) the date ten Exchange
Business Days immediately following the Valuation Date.
 
 
 
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13.  Representations, Warranties and Acknowledgments.

(a)           Issuer hereby represents and warrants to MSCO on the date hereof
and on and as of the Initial Share Delivery Date that:

(i)           (A) None of Issuer and its officers and directors is aware of any
material nonpublic information regarding Issuer or the Shares, and Issuer is
entering into the Transaction in good faith and not as part of a plan or scheme
to evade the prohibitions of federal securities laws, including, without
limitation, Rule 10b-5 under the Exchange Act and (B) Issuer agrees not to alter
or deviate from the terms of the Agreement or enter into or alter a
corresponding or hedging transaction or position with respect to the Shares
(including, without limitation, with respect to any securities convertible or
exchangeable into the Shares) during the term of the Agreement.  Without
limiting the generality of the foregoing, all reports and other documents filed
by Issuer with the Securities and Exchange Commission pursuant to the Exchange
Act when considered as a whole (with the more recent such reports and documents
deemed to amend inconsistent statements contained in any earlier such reports
and documents) do not contain any untrue statement of a material fact or any
omission of a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading.

(ii)           The transactions contemplated by this Confirmation have been
authorized under Issuer’s publicly announced program to repurchase Shares and,
prior to the Trade Date, MSCO shall deliver to Issuer a resolution of Issuer’s
board of directors authorizing the Transaction and such other certificate or
certificates as MSCO shall reasonably request.

(iii)           Issuer is not entering into this Agreement to facilitate a
distribution of the Shares (or any security convertible into or exchangeable for
Shares) or in connection with a future issuance of securities.

(iv)           Issuer is not entering into this Agreement to create actual or
apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress the price of the Shares (or any
security convertible into or exchangeable for Shares) in violation of the
federal securities laws.

(v)           There have been no purchases of Shares in Rule 10b-18 purchases of
blocks pursuant to the once-a-week block exception contained in Rule
10b-18(b)(4) by or for Issuer or any of its affiliated purchasers during each of
the four calendar weeks preceding the Trade Date and during the calendar week in
which the Trade Date occurs (“Rule 10b-18 purchase”, “blocks” and “affiliated
purchaser” each being used as defined in Rule 10b-18).

(vi)           Issuer is as of the date hereof, and immediately after giving
effect to the transactions contemplated hereby will be, Solvent.  As used in
this paragraph, the term “Solvent” means, with respect to a particular date,
that on such date (A) the present fair market value (or present fair saleable
value) of the assets of Issuer is not less than the total amount required to pay
the liabilities of Issuer on its total existing debts and liabilities (including
contingent liabilities) as they become absolute and matured, (B) Issuer is able
to realize upon its assets and pay its debts and other liabilities, contingent
obligations and commitments as they mature and become due in the normal course
of business, (C) assuming consummation of the transactions as contemplated by
this Agreement, Issuer is not incurring debts or liabilities beyond its ability
to pay as such debts and liabilities mature, (D) Issuer is not engaged in any
business or transaction, and does not propose to engage in any business or
transaction, for which its property would constitute unreasonably small capital
after giving due consideration to the prevailing practice in the industry in
which Issuer is engaged, (E) Issuer is not a defendant in any civil action that
could reasonably be expected to result in a judgment that Issuer is or would
become unable to satisfy, (F) Issuer is not “insolvent” (as such term is defined
under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States
Code) (the “Bankruptcy Code”))
 
 
 
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and (G) Issuer would be able to purchase Shares with an aggregate purchase price
equal to the Prepayment Amount in compliance with the corporate laws of the
jurisdiction of its incorporation.

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

(viii)           No state or local (including non-U.S. jurisdictions) 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 MSCO or its affiliates owning or holding (however defined) Shares.

(b)           Issuer acknowledges and agrees that the Initial Shares  may be
sold short to Issuer. Issuer further acknowledges and agrees that MSCO may
purchase Shares in connection with the Transaction, which Shares may be used to
cover all or a portion of such short sale or may be delivered to Issuer.  Such
purchases and any other market activity by MSCO will be conducted independently
of Issuer by MSCO as principal for its own account.  All of the actions to be
taken by MSCO in connection with the Transaction shall be taken by MSCO
independently and without any advance or subsequent consultation with
Issuer.  It is the intent of the parties that the Transaction comply with the
requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act, and the parties
agree that this Confirmation shall be interpreted to comply with the
requirements of such Rule, and Issuer shall not take any action that results in
the Transaction not so complying with such requirements.  Without limiting the
generality of the preceding sentence, Issuer acknowledges and agrees that (A)
Issuer does not have, and shall not attempt to exercise, any influence over how,
when or whether MSCO effects any market transactions in connection with the
Transaction and (B) neither Issuer nor its officers or employees shall, directly
or indirectly, communicate any information regarding Issuer or the Shares to any
employee of MSCO or its Affiliates, other than employees identified by MSCO to
Issuer in writing as employees not responsible for executing market transactions
in connection with the Transaction.  Issuer also acknowledges and agrees that
any amendment, modification, waiver or termination of this Confirmation must be
effected in accordance with the requirements for the amendment or termination of
a “plan” as defined in Rule 10b5-1(c) under the Exchange Act.  Without limiting
the generality of the foregoing, any such amendment, modification, waiver or
termination shall be made in good faith and not as part of a plan or scheme to
evade the prohibitions of Rule 10b-5 under the Exchange Act, and no such
amendment, modification or waiver shall be made at any time at which Issuer or
any officer or director of Issuer is aware of any material nonpublic information
regarding Issuer or the Shares.

(c)           Each of Issuer and MSCO represents and warrants to the other that
it is an “eligible contract participant” as defined in Section 1a(12) of the
U.S. Commodity Exchange Act, as amended.

(d)           Each of Issuer and MSCO acknowledges that the offer and sale of
the Transaction to it is intended to be exempt from registration under the
Securities Act by virtue of Section 4(2) thereof.  Accordingly, it represents
and warrants to the other party that (i) it has the financial ability to bear
the economic risk of its investment in the Transaction and is able to bear a
total loss of its investment, (ii) it is an “accredited investor” as that term
is defined in Regulation D as promulgated under the Securities Act, (iii) it is
entering into the Transaction for its own account and without a view to the
distribution or resale thereof and (iv) the assignment, transfer or other
disposition of the Transaction has not been and will not be registered under the
Securities Act and is restricted under this Confirmation, the Securities Act and
state securities laws.

14.  Acknowledgements of Issuer Regarding Hedging and Market Activity.

Issuer agrees, understands and acknowledges that:

(a)            during the period from (and including) the Trade Date to (and
including) the Settlement Date, MSCO and its Affiliates may buy or sell Shares
or other securities or buy or sell options or futures contracts or
 
 
 
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enter into swaps or other derivative transactions in order to adjust its Hedge
Position with respect to the Transaction;

(b)            MSCO and its Affiliates also may be active in the market for the
Shares or options, futures contracts, swaps or other derivative transactions
relating to the Shares other than in connection with hedging activities in
relation to the Transaction;

(c)            MSCO shall make its own determination as to whether, when and in
what manner any hedging or market activities in Issuer’s securities or other
securities or transactions 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
Transaction; and

(d)            any such market activities of MSCO and its Affiliates may affect
the market price and volatility of the Shares, including the 10b-18 VWAP and the
Forward Price, each in a manner that may be adverse to Issuer.

15.  Other Provisions.

(a)            Issuer agrees and acknowledges that MSCO is a “financial
institution” and “financial participant” within the meaning of Sections 101(22)
and 101(22A) of the Bankruptcy Code.  The parties hereto further agree and
acknowledge that it is the intent of the parties that (A) this Confirmation is a
“securities contract,” as such term is defined in Section 741(7) of the
Bankruptcy Code, with respect to which each payment and delivery hereunder or in
connection herewith is a “termination value,” “payment amount” or “other
transfer obligation” within the meaning of Section 362 of the Bankruptcy Code
and a “settlement payment,” within the meaning of Section 546 of the Bankruptcy
Code, and (B) MSCO is entitled to the protections afforded by, among other
sections, Sections 362(b)(6), 362(b)(17), 362(o), 546(e), 555 and 561 of the
Bankruptcy Code.

(b)            MSCO and Issuer hereby agree and acknowledge that MSCO has
authorized Issuer to disclose the Transaction to any and all persons, and there
are no express or implied agreements, arrangements or understandings to the
contrary, and authorizes Issuer to use any information that Issuer receives or
has received with respect to the Transaction in any manner.

(c)            In the event Issuer becomes the subject of proceedings
(“Bankruptcy Proceedings”) under the Bankruptcy Code or any other applicable
bankruptcy or insolvency statute, any rights or claims of MSCO hereunder in
respect of the Transaction shall rank for all purposes no higher than, but on a
parity with, the rights or claims of holders of Shares, and MSCO hereby agrees
that its rights and claims hereunder shall be subordinated to those of all
parties with claims or rights against Issuer (other than common stockholders) to
the extent necessary to assure such ranking. Without limiting the generality of
the foregoing, after the commencement of Bankruptcy Proceedings, the claims of
MSCO hereunder shall for all purposes have rights equivalent to the rights of a
holder of a percentage of the Shares equal to the aggregate amount of such
claims (the “Claim Amount”) taken as a percentage of the sum of (i) the Claim
Amount and (ii) the aggregate fair market value of all outstanding Shares on the
record date for distributions made to the holders of such Shares in the related
Bankruptcy Proceedings.  Notwithstanding any right it might otherwise have to
assert a higher priority claim in any such Bankruptcy Proceedings, MSCO shall be
entitled to receive a distribution solely to the extent and only in the form
that a holder of such percentage of the Shares would be entitled to receive in
such Bankruptcy Proceedings, and, from and after the commencement of such
Bankruptcy Proceedings, MSCO expressly waives (i) any other rights or
distributions to which it might otherwise be entitled in such Bankruptcy
Proceedings in respect of its rights and claims hereunder and (ii) any rights of
setoff it might otherwise be entitled to assert in respect of such rights and
claims.

(d)            Notwithstanding any provision of this Confirmation or any other
agreement between the parties to the contrary, neither the obligations of Issuer
nor the obligations of MSCO hereunder are secured by any collateral, security
interest, pledge or lien.
 
 
 
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(e)            Each party waives any and all rights it may have to set off
obligations arising under the Agreement and the Transaction against other
obligations between the parties, whether arising under any other agreement,
applicable law or otherwise.

(f)            Notwithstanding anything to the contrary herein, MSCO may, by
prior notice to Issuer, satisfy its obligation to deliver any Shares or other
securities on any date due (an “Original Delivery Date”) by making separate
deliveries of Shares or such securities, as the case may be, at more than one
time on or prior to such Original Delivery Date, so long as the aggregate number
of Shares and other securities so delivered on or prior to such Original
Delivery Date is equal to the number required to be delivered on such Original
Delivery Date.

(g)            It shall constitute an Additional Termination Event with respect
to which the Transaction is the sole Affected Transaction and Issuer is the sole
Affected Party and MSCO shall be the party entitled to designate an Early
Termination Date pursuant to Section 6(b) of the Agreement if, on any Exchange
Business Day on or prior to the Valuation Date, the closing price per Share on
the Exchange, as determined by the Calculation Agent, is at or below the
Threshold Price (as specified in Schedule I).

16.  Share Cap.

Notwithstanding any other provision of this Confirmation or the Agreement to the
contrary, in no event shall Issuer be required to deliver to MSCO in the
aggregate a number of Shares that exceeds the Share Cap as of the date of
delivery (as specified in Schedule I).

17.  Transfer and Assignment.

MSCO may transfer or assign its rights and obligations hereunder and under the
Agreement, in whole or in part, to any of its Affiliates of equivalent credit
quality (or whose obligations are guaranteed by an entity of equivalent credit
quality) without the consent of Issuer.

18.  Governing Law; Jurisdiction; Waiver.

THIS CONFIRMATION AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED
TO THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.  THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE
ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM
WITH RESPECT TO, THESE COURTS.

EACH PARTY HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS
OF ISSUER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT
HEREOF.

Remainder of Page Intentionally Blank

 
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_________________________________________________________________________________

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to us by facsimile to
the number provided on the attached facsimile cover page.

Confirmed as of the date first written above:

PTC Inc.
MORGAN STANLEY & CO. LLC
By:           /s/ Jeffrey D. Glidden____
Name:  Jeffrey D. Glidden
Title:  EVP and CEO
By:           /s/ Sebastian Crapanzano___
Name: Sebastian Crapanzano
Title:  Managing Director
 
       

 
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Schedule I

For the purposes of the Transaction, the following terms shall have the
following values or meanings:

The Trade Date shall be August 14, 2014.

The Discount equals (i) the official closing price of the Shares on the Exchange
on the Trade Date multiplied by (ii) 155 bps.

The Initial Shares equal 2,300,210 Shares.

The Prepayment Amount equals USD 125,000,000.

The Commission Amount equals USD 0.00.

The Adjustment Amount equals USD 0.00.

The Structuring Fee equals USD 0.00.

The Scheduled Valuation Date shall be February 17, 2015.

The Lock-Out Date shall be November 11, 2014.

Ordinary Dividend Amount:  USD 0.00

Ordinary Dividend Record Dates:  N/A

Threshold Price:  USD 19.02

As of any date, the Share Cap  shall equal the lesser of (i) 25 million Shares
and (ii) 20% of the total number of Shares that Issuer has outstanding as of
such date.