Exhibit 10.2

 

[Dealer address]

 

                [_______], 2020

 

 

To:         The Middleby Corporation
1400 Toastmaster Drive
Elgin, Illinois 60120
Attention:          [          ]
Email:                [          ]
Telephone No.: [          ]

 

Re:          [Base][Additional] Call Option Transaction

 

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 The Middleby 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 August 18, 2020 (the “Offering Memorandum”), relating to the 1.00%
Convertible Senior Notes due 2025 (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 650,000,000 (as increased by [up to] an aggregate principal amount
of USD 97,500,000 [if and to the extent that] [pursuant to the exercise by] the
Initial Purchasers (as defined herein) [exercise] [of] their option to purchase
additional Convertible Notes pursuant to the Purchase Agreement (as defined
herein)), pursuant to an Indenture [to be] dated August 21, 2020 between
Counterparty and U.S. Bank National Association as trustee (the “Indenture”). In
the event of any inconsistency between the terms defined in the Offering
Memorandum, the Indenture and this Confirmation, this Confirmation shall govern.
The parties acknowledge that this Confirmation is entered into on the date
hereof with the understanding that (i) definitions set forth in the Indenture
which are also defined herein by reference to the Indenture and (ii) sections of
the Indenture that are referred to herein 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] [Indenture as executed]. 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 10.01(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 14.07 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 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.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; and

 

(b)(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 shareholders’ equity; 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: [________], 2020   Effective Date: The Trade Date   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 “MIDD”).

 

Number of Options: [_______]. 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
[______].   Strike Price: USD [______]

 

2

 

 

Cap Price: USD [______]

 

Premium: USD [______]

 

Premium Payment Date: [_______], 2020

 

Exchange: The Nasdaq Global Select Market

 

Related Exchange(s): All Exchanges   Excluded Provisions: Section 14.03 and
Section 14.04(h) 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 Section 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 14.02(b) of the Indenture.   Free Convertibility Date: June 1,
2025   Expiration Time: The Valuation Time   Expiration Date: September 1, 2025,
subject to earlier exercise.   Multiple Exercise: Applicable, as described under
“Exercise on Conversion Dates” below.   Exercise on Conversion Dates:

Notwithstanding Section 3.4 of the Equity Definitions, (i) 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 [          ], 2020 between
Dealer and Counterparty (the “Base Call Option Confirmation”),] 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.

 

3

 

 

Notice of Exercise: Notwithstanding anything to the contrary in the Equity
Definitions or “Exercise on Conversion Dates” above, Counterparty shall exercise
any Options relating to Convertible Notes with a Conversion Date occurring on or
after the Free Convertibility Date by notifying 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 Cash Percentage for such
Options is not 0%, 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) the Cash Percentage for the related
Convertible Notes, 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 Cash Percentage for the related Convertible Notes is 0%.
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
Cash Percentage with respect to the Convertible Notes that is not 0%.

 

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 listed or admitted for trading to open for trading during its regular
trading session or (ii) the occurrence or existence prior to 1:00 p.m. (New York
City time) on any Exchange Business Day for more than one half-hour period in
the aggregate during regular trading hours of any suspension or limitation
imposed on trading (by reason of movements in price exceeding limits permitted
by the relevant stock exchange or otherwise) in the Shares or in any options
contracts or futures contracts relating to the Shares.”

 

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.

 

4

 

 

  Cash Percentage: The integral percentage (which may be from 0% to 100%,
inclusive) of each Share otherwise issuable upon conversion in excess of the
principal portion of the Convertible Notes being converted that Counterparty has
elected to pay in cash pursuant to Section 14.02(a) of the Indenture.   Relevant
Settlement Method: In respect of any Option:    

(i)            if Counterparty has not elected a Cash Percentage or has elected
a Cash Percentage of 0% pursuant to Section 14.02(a) of the Indenture for
purposes of settling its conversion obligations in respect of the related
Convertible Note, then, in each case, the Relevant Settlement Method for such
Option shall be Net Share Settlement;

 

(ii)            if Counterparty has elected a Cash Percentage pursuant to
Section 14.02(a) of the Indenture that is greater than 0% and less than 100% for
purposes of settling its conversion obligations in respect of the related
Convertible Note, then the Relevant Settlement Method for such Option shall be
Combination Settlement; and

 

(iii)            if Counterparty has elected a Cash Percentage pursuant to
Section 14.02(a) of the Supplemental Indenture of 100% for purposes of settling
its conversion obligations in respect of the related Convertible Note, 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 hereunder or deemed exercised, 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
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)an amount in 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
product of (1) the Cash Percentage 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 for any Valid Day, the
Daily Combination Settlement Cash Amount for such Valid Day shall be deemed to
be zero; and

 

5

 

 

(ii)a number of 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) the product of (1) the Daily Option Value on such
Valid Day and (2) the difference (expressed as a fraction) of (I) 100% and
(II) the Cash Percentage, divided by (B) the Relevant Price on such Valid Day,
divided by (C) the number of Valid Days in the Settlement Averaging Period;
provided that if the calculation in sub-clause (A)(1) above results in zero 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 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.   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, 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.

 

6

 

 

Applicable Limit Price: On any day, the opening price as displayed under the
heading “Op” on Bloomberg page MIDD <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 Exchange or, if the Shares are not then
listed on the Exchange, on the principal other 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 listed or
admitted for trading. If the Shares are not so listed or admitted for trading,
“Valid Day” means a Business Day.   Scheduled Valid Day: A day that is scheduled
to be a Valid Day on the principal United States national or regional securities
exchange or market on which the Shares are listed or admitted for trading. If
the Shares are not so listed or admitted for trading, “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 as displayed under the heading
“Bloomberg VWAP” on Bloomberg page MIDD <equity> AQR (or its equivalent
successor if such page is not available) in respect of the period from the
scheduled opening time of the Exchange to the Scheduled Closing Time of the
Exchange on such Valid Day (or if such volume-weighted average price is
unavailable at such time, the market value of one Share on such Valid Day, as
determined by the Calculation Agent in good faith and 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 trading hours.   Settlement
Averaging Period: For any Option, the 40 consecutive Valid Days commencing on,
and including, the 41st 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.

 

7

 

 

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(z) 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 “unit of Reference Property” or to any
“Last Reported Sale Price”, “Daily VWAP,” “Daily Conversion Value” or “Daily
Settlement Amount” (each as defined in the Indenture). For the avoidance of
doubt, Dealer shall not have any delivery or payment obligation hereunder, and
no adjustment shall be made to the terms of the Transaction, on account of
(x) any distribution of cash, property or securities by Counterparty to holders
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 fifth sentence of the first paragraph of
Section 14.04(c) of the Indenture or the fourth sentence of Section 14.04(d) 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(z) below), upon any Potential Adjustment Event, the Calculation
Agent, acting in good faith and in a commercially reasonable manner, shall make
an adjustment to any one or more of the Strike Price and the Option Entitlement
corresponding to the adjustment required to be made pursuant to the Indenture to
the “Conversion Rate” (as such term is defined in the Indenture).    
Notwithstanding the foregoing and “Consequences of Merger Events / Tender
Offers” below:

 

8

 

 

(i)if the Calculation Agent in good faith and a commercially reasonable manner
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 14.05 of the Indenture, Section 14.07 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 14.04(b) of the Indenture or Section 14.04(c) of
the Indenture where, in either case, the period for determining “Y” (as such
term is used in Section 14.04(b) of the Indenture) or “SP0” (as such term is
used in Section 14.04(c) 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 have the right to
adjust any variable relevant to the exercise, settlement or payment for the
Transaction as appropriate to reflect the costs (to account solely for hedging
mismatches and market losses) and expenses incurred by Dealer in connection with
commercially reasonable 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

 

9

 

 

(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 have the right to
adjust any variable relevant to the exercise, settlement or payment for the
Transaction as appropriate to reflect the costs (to account solely for hedging
mismatches and market losses) and expenses incurred by Dealer in connection with
commercially reasonable 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 14.04(a), (b), (c), (d) and (e) and
Section 14.05 of the Indenture.   Extraordinary Events applicable to the
Transaction:   Merger Events: Applicable; provided that notwithstanding
Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence
of any event or condition set forth in the definition of “Merger Event” in
Section 14.07(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 14.04(e) 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(z) 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 to the
extent that an analogous adjustment is required to be made pursuant to the
Indenture in respect of such Merger Event or Tender Offer, 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 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 sole 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.

 

10

 

 

 

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, (x) 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”,
(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
whether the relevant Announcement Event has had a material economic effect on
the Transaction (and, if so, shall adjust the Cap Price accordingly) on one or
more occasions on or after the date of the Announcement Event up to, and
including, and shall make a determination on, 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. 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: (i) The public announcement by (A) Counterparty, any
subsidiary of Counterparty or any Valid Third-Party Entity of any transaction or
event that the Calculation Agent determines is reasonably likely to be completed
and that, if completed, would constitute a Merger Event or Tender Offer (it
being understood and agreed that in determining whether such transaction or
event is reasonably likely to be completed, the Calculation Agent may take into
consideration the effect of the relevant announcement on the Shares and/or
options relating to the Shares), (B) Counterparty or any subsidiary thereof of
any potential acquisition 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 (a “Transformative Transaction”) or
(C) Counterparty, any subsidiary of Counterparty or any Valid Third-Party Entity
of the bona fide intention to enter into a Merger Event or Tender Offer or a
Transformative Transaction (in the case of a Valid Third-Party Entity, that the
Calculation Agent determines is capable, financially and otherwise, of
consummating the relevant Merger Event, Tender Offer or Transformative
Transaction, it being understood and agreed that in making such determination,
the Calculation Agent may take into consideration the effect of the relevant
announcement on the Shares and/or options relating to the Shares), (ii) the
public announcement by Counterparty of an intention to solicit or enter into, or
to explore strategic alternatives or other similar undertaking that may include,
a Merger Event or Tender Offer or a Transformative Transaction or (iii) any
subsequent public announcement by any entity of a change to a transaction or
intention that is the subject of an announcement of the type described in clause
(i) or (ii) 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), 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
Section 12.1(d) of the Equity Definitions is hereby amended by replacing “10%”
with “20%” in the third line thereof.

 

11

 

 

Valid Third-Party Entity: In respect of any 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).    
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 and
any law, regulation or interpretation, the consequence of such law, regulation
or interpretation is applied equally by Dealer to all of its similarly situated
counterparties and/or similar transactions, if any;” 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 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

 

12

 

 

Hedging Party: For all applicable Additional Disruption Events, Dealer; provided
that when making any determination or calculation as “Hedging Party” (but not,
for the avoidance of doubt, the making of any election it is entitled to make as
“Hedging 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 the Hedging Party were the
Calculation Agent.

 

  Following any determination or calculation by Hedging Party hereunder (other
than, for the avoidance of doubt, the making of any election by Hedging Party
that is entitled to make as “Hedging Party”), upon a written request by
Counterparty (which may be by email), Hedging Party will promptly (but in any
event within five Scheduled Trading 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 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 Scheduled Trading 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 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

13

 

 

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, 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 Scheduled
Trading 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 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.

 

5. Account Details.  

 

(a) Account for payments to Counterparty: To be provided separately by
Counterparty.       Account for delivery of Shares to Counterparty: To be
provided separately by Counterparty.     (b) Account for payments to Dealer:

 

  Bank: [____________]   ABA#: [____________]   Acct No.: [____________]  
Beneficiary: [____________]   Ref: [____________]         Account for delivery
of Shares from Dealer:         [____________]  

 

14

 

 

6. Offices.

 

(a)The Office of Counterparty for the Transaction is: Inapplicable, Counterparty
is not a Multibranch Party.

 

(b)The Office of Dealer for the Transaction is: [____________]

 

[Dealer’s Office Address]

 

 

7.Notices.

 

(a)Address for notices or communications to Counterparty:

 

The Middleby Corporation
1400 Toastmaster Drive
Elgin, Illinois 60120
Attention:      [          ]
Email:            [          ]
Telephone No.:      [          ]

 

(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
August 18, 2020 among Counterparty and [          ] and [          ], as
representatives of the Initial Purchasers party thereto (the “Initial
Purchasers”), are true and correct 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
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 restated certificate of incorporation or
amended and restated bylaws (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.

15

 

 

(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 (the “Commodity
Exchange Act”), 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 equity securities 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.

 

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).

 

10.Other Provisions.

 

(a)Opinions. 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 (c) of this Confirmation (it being understood that such
opinions of counsel shall be limited to the federal laws of the United States,
the laws of the State of New York and the General Corporate Law of the State of
Delaware and may contain customary limitations, exceptions and qualifications).
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.

16

 

 

(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
[__]million (in the case of the first such notice) or (ii) thereafter more than
[__]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 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
commercially reasonable 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. 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. If the indemnification provided for in this paragraph is unavailable to
an Indemnified Person or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then Counterparty hereunder, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities. The remedies provided for in this paragraph (b) are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Person at law or in equity. The indemnity and
contribution agreements contained in this paragraph shall remain operative and
in full force and effect regardless of the termination of the Transaction.

 

(c)Regulation M. Counterparty is not on the Trade Date engaged in a
distribution, as such term is used in Regulation M under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), of any securities of Counterparty,
other than (i) a distribution meeting the requirements of the exception set
forth in Rules 101(b)(10) and 102(b)(7) of Regulation M and (ii) the
distribution of the Convertible Notes. Counterparty shall not, until the second
Scheduled Trading Day immediately following the Effective Date, engage in any
such distribution.

17

 

 

(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 all or any of its
rights and obligations hereunder with respect to all, or any, of the Options
hereunder (such Options, the “Transfer Options”); provided that such transfer or
assignment shall be subject to reasonable conditions that Dealer may impose,
including but not limited, to the following conditions:

 

(A)With respect to any Transfer Options, Counterparty shall not be released from
its notice and indemnification obligations pursuant to Section 10(b) or any
obligations under Section 10(o) of this Confirmation;

 

(B)Such transfer or assignment shall be effected on terms, including any
reasonable undertakings by such third party (including, but not limited to, an
undertaking with respect to compliance with applicable securities laws in a
manner that, in the reasonable judgment of Dealer, will not expose Dealer to
material risks under applicable securities laws) and execution of any
documentation and delivery of legal opinions with respect to securities laws and
other matters by such third party and Counterparty, as are reasonably requested
and reasonably satisfactory to Dealer;

 

(C)Dealer will not, as a result of such transfer or assignment, be required to
pay the transferee or assignee on any payment date an amount or number of Shares
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
or assignment;

 

(D)An Event of Default, Potential Event of Default or Termination Event will not
occur as a result of such transfer and assignment;

 

(E)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 (C) and (D) will not occur upon or after such transfer and assignment,
including but not limited to providing tax documentation specified in
Section 10(cc) of this Confirmation and making the tax representations specified
in Section 10(ff) of this Confirmation on or prior to such transfer and at the
other times specified in such Sections; and

 

(F)Counterparty shall be responsible for all reasonable costs and expenses,
including reasonable counsel fees, incurred by Dealer in connection with such
transfer or assignment.

18

 

 

(ii)Dealer may transfer or assign all or any part of its rights or obligations
under the Transaction (A) without Counterparty’s consent, to any affiliate of
Dealer (1) that has a long-term issuer rating that is equal to or better than
Dealer’s credit rating at the time of such transfer or assignment, 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 its ultimate parent (provided that in connection with any assignment or
transfer pursuant to clause (A)(2) hereof, the guarantee of any guarantor of the
relevant transferee’s obligations under the Transaction shall constitute a
Credit Support Document under the Agreement) or (B) with Counterparty’s consent
(such consent not to be unreasonably withheld or delayed), to any third party
financial institution that is a recognized dealer in the market for U.S.
corporate equity derivatives and that has a long-term issuer rating equal to or
better than the lesser of (1) the credit rating of Dealer at the time of the
transfer, (2) A- by Standard and Poor’s Rating Group, Inc. or its successor
(“S&P”) and A3 by Moody’s Investor Service, Inc. or its successor (“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, in the case of any transfer or assignment described
in clause (A) or (B) above, (I) an Event of Default, Potential Event of Default
or Termination Event will not occur as a result of such transfer and assignment;
(II) Counterparty will not receive from the transferee or assignee on any
payment date or delivery date an amount or a number of Shares, as applicable,
lower than the amount or the number of Shares, as applicable, that Dealer would
have been required to pay or deliver to Counterparty in the absence of such
transfer or assignment; (III) 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; (IV) such transfer or assignment does
not cause a deemed exchange for Counterparty of the Transaction under
Section 1001 of the Code (as defined in Section 10(dd) below); and (V) Dealer
shall cause the transferee or assignee 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 events described in
clauses (II), (III) and (IV) of this proviso will not occur upon or after such
transfer or assignment. If at any time at which (A) the Section 16 Percentage
exceeds 9%, (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 no
Excess Ownership Position exists, then Dealer may designate any Exchange
Business Day as an Early Termination Date with respect to a portion of the
Transaction (the “Terminated Portion”), such that following such partial
termination no Excess Ownership Position exists. In the event that Dealer so
designates an Early Termination Date with respect to a portion of the
Transaction, a payment shall be made pursuant to Section 6 of the Agreement as
if (1) an Early Termination Date had been designated in respect of a Transaction
having terms identical to the Transaction and a Number of Options equal to the
number of Options underlying the Terminated Portion, (2) Counterparty were the
sole Affected Party with respect to such partial termination and (3) the
Terminated Portion were the sole Affected Transaction (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). Dealer shall notify Counterparty of an Excess Ownership
Position with respect to which it intends to seek a transfer or assignment as
soon as reasonably practicable after becoming aware of such an Excess Ownership
Position. 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 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. The “Share Amount” as of any day is the number of Shares that
Dealer and any person whose ownership position would be aggregated with that of
Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule,
regulation, regulatory order or organizational documents or contracts of
Counterparty that are, in each case, applicable to ownership of Shares
(“Applicable Restrictions”), owns, beneficially owns, constructively owns,
controls, holds the power to vote or otherwise meets a relevant definition of
ownership under any Applicable Restriction, as determined by Dealer in its
reasonable discretion. The “Applicable Share Limit” means a number of Shares
equal to (A) the minimum number of Shares that could give rise to reporting or
registration obligations or other requirements (including obtaining prior
approval from any person or entity) of a Dealer Person (except for filings of
Form 13F, Schedule 13D or Schedule 13G under the Exchange Act), or could result
in an adverse effect on a Dealer Person, under any Applicable Restriction, as
determined by Dealer in its reasonable discretion, minus (B) 1% of the number of
Shares outstanding.

19

 

 

(iii)Notwithstanding any other provision in this Confirmation to the contrary
requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or
other securities, or make or receive any payment in cash, to or from
Counterparty, Dealer may designate any of its affiliates to purchase, sell,
receive or deliver such Shares or other securities, or to make or receive such
payment in cash, and otherwise to perform Dealer’s obligations in respect of the
Transaction and any such designee may assume such obligations. Dealer shall be
discharged of its obligations to Counterparty to (and only to) the extent of any
such performance.

 

(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 shall occur on or prior to such 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.

 

20

 

 

(g)[Reserved.]

 

(h)[Reserved.]

 

(i)Additional Termination Events.

 

(i)Notwithstanding anything to the contrary in this Confirmation, upon any Early
Conversion in respect of which Counterparty has delivered an Early Conversion
Notice (as defined below):

 

(A)the giving of such Early Conversion Notice shall constitute an Additional
Termination Event as provided in this clause (i); provided that any such Early
Conversion Notice shall contain an acknowledgment by Counterparty of its
responsibilities under applicable securities laws, and in particular Section 9
and Section 10(b) of the Exchange Act and the rules and regulations thereunder,
in respect of the delivery of such Early Conversion Notice; provided further
that the provisions of this Section 10(i)(i) shall not apply to any Affected
Convertible Note (i) with respect to which Counterparty has elected the
“Exchange in Lieu of Conversion” option pursuant to Section 14.12 of the
Indenture and (ii) that has been accepted by the designated financial
institution pursuant to Section 14.12 of the Indenture, except to the extent
that Counterparty notifies Dealer, within ten Scheduled Trading Days of the then
applicable conversion settlement date determined pursuant to Section 14.02(c) of
the Indenture, that (x) such financial institution has failed to pay or deliver,
as the case may be, the consideration due upon conversion of such Affected
Convertible Note, or (y) such Affected Convertible Note is subsequently
resubmitted to Counterparty for Early Conversion in accordance with the terms of
the Indenture;

 

(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 on or as promptly as reasonably practicable after the related
conversion settlement 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 (as defined below) [minus the “Affected Number of Options” (as
defined in the Base Call Option Confirmation), if any, that relate to such
Affected Convertible Notes] 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)(C) as if 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 to the Holder (as such term is defined in the Indenture) of
an Affected Convertible Note upon conversion of such Affected Convertible Note
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 fair market value of one Share
as determined by the Calculation Agent, minus (y) USD 1,000;

 

21

 

 

(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 have occurred pursuant to any Excluded Provision and
(z) the corresponding Convertible Notes remain outstanding; 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.

 

(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 6.01 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 resulting from
the repurchase of any Convertible Notes by Counterparty upon the occurrence of a
“Fundamental Change” or in connection with an “Optional Redemption” (both as
defined in 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 of such Repayment Event, in each case, including
the aggregate principal amount of Convertible Notes subject to such Repayment
Event (any such notice, a “Repayment Notice”); provided that any such Repayment
Notice shall contain an acknowledgement by Counterparty of its responsibilities
under applicable securities laws, and in particular Section 9 and
Section 10(b) of the Exchange Act and the rules and regulations thereunder, in
respect of the delivery of such Repayment Notice and shall remake the
representation set forth in Section 8(f) hereof as of the date of such Repayment
Notice. [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]. 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 (which Exchange Business Day shall be on or as promptly as reasonably
practicable after the related repurchase settlement date for the relevant
repayment event) 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)],
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, (3) no adjustments to the Conversion Rate have occurred
pursuant to an Excluded Provision, (4) the corresponding Convertible Notes
remain outstanding, (5) the relevant Repayment and any conversions, adjustments,
agreements, payments, deliveries or acquisitions by or on behalf of Counterparty
leading thereto had not occurred and (6) the terminated portion of the
Transaction were the sole Affected Transaction; provided that, in the event of a
Repayment Event pursuant to Section [_____]of the Indenture, the Repayment
Unwind Payment shall not be greater than (x) the Applicable Percentage
multiplied by (y) the number of Repayment Options multiplied by the excess of
(I) the amount paid by Counterparty per Convertible Note pursuant to
Section [____]of the Indenture over (II) USD 1,000 per Convertible Note.
“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 in
exchange for delivery of any property or assets of Counterparty or any of its
subsidiaries (howsoever described), (iii) any principal of any of the
Convertible Notes is repaid prior to the final maturity date of the Convertible
Notes (other than as a result of an acceleration of the Convertible Notes that
results in an Additional Termination Event pursuant to Section 10(i)), 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.

 

22

 

 

(j)Amendments to Equity Definitions.

 

(i)Solely in respect of adjustments to the Cap Price pursuant to Section 10(z),
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 Counterparty 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
the Company’s own stock or (b) an observable index, other than an index
calculated and measured solely by reference to Company’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 60 days

 

23

 

 

(iii)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 Calculation Agent is
called upon to make an adjustment 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 Calculation Agent shall
make such adjustment in a commercially reasonable manner by reference to the
effect of such event on Hedging Party, assuming that Hedging Party 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 and (b) Counterparty remakes the
representation set forth in Section 8(f) hereof as of the date of such election
and 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 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.

 

24

 

 

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
discretion by commercially reasonable means and notified by the Calculation
Agent to Dealer at the time of notification of the Payment Obligation; provided
that to the extent the Share Termination Delivery Unit consists of one Share
(subject to “Consequences of Merger Events / Tender Offers” above), the value of
such Share will be equal to the average of the per Share volume-weighted average
price as displayed under the heading “Bloomberg VWAP” on Bloomberg page MIDD
<equity> AQR (or its equivalent successor if such page is not available) over a
period of time determined by the Calculation Agent to be reasonably necessary to
establish or unwind a commercially reasonable hedge position.

 

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. If such
Naturalization, 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.

 

25

 

 

(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 commercially 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; for the
avoidance of doubt, any such adjustment shall be made solely to the extent
permitted under ASC 815-40); 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 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 purchases of Shares in
connection with 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 of organizations with jurisdiction
over Dealer or its affiliates, or with related policies and procedures adopted
by Dealer in good faith so long as such policies and procedures would generally
be applicable to counterparties similar to Counterparty and transactions similar
to the Transaction); provided that no such Valid Day or other date of valuation,
payment or delivery may be postponed or added more than 20 Valid Days after the
original Valid Day or other date of valuation, payment or delivery, as the case
may be.

 

26

 

 

(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 (Title 11 of the United States Code) (the “Bankruptcy
Code”), and the parties hereto to be entitled to the protections afforded by,
among other Sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and
560 of the Bankruptcy Code, (ii) a party’s right to liquidate the Transaction
and to exercise any other remedies upon the occurrence of any Event of Default
under the Agreement with respect to the other party to constitute a “contractual
right” as described in the Bankruptcy Code, and (iii) each payment and delivery
of cash, securities or other property hereunder to constitute a “margin payment”
or “settlement payment” and a “transfer” as defined in the Bankruptcy Code.

 

(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 (x) the
weighted average of the types and amounts of consideration that holders of
Shares have elected to receive upon consummation of such Merger Event or (y) if
no holders of Shares affirmatively make such election, the types and amounts of
consideration actually received by holders of Shares (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, Merger Event or Tender Offer and (B) promptly
following any such adjustment, Counterparty shall give Dealer written notice of
the details of such adjustment.

 

(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)).

 

27

 

 

(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”] [“Additional
Securities”] (as defined in the Purchase Agreement) is not consummated with the
Initial Purchasers for any reason, or Counterparty fails to deliver to Dealer
opinions of counsel as required pursuant to Section 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)Early Conversion Notice. 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, 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.

 

(y)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.

 

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(z)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, and 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; provided that (i) in no event
shall the Cap Price be less than the Strike Price; (ii) with respect to any
Announcement Event (or any event that would be an Announcement Event if “35%”
and “20%” in the definition thereof were replaced with “0%”), no adjustment to
the Cap Price shall be made pursuant to this Section 10(z); (iii) for the
purposes of this Section 10(z), (A) Section 11.2(e)(v) of the Equity Definitions
is hereby amended by adding the phrase “, provided that, notwithstanding this
Section 11.2(e)(v), with respect to the Transaction, the following repurchases
of Shares by the Issuer or any of its subsidiaries shall not constitute
Potential Adjustment Events: any repurchases of Shares in open market or
privately negotiated transactions at prevailing market prices or privately
negotiated accelerated Share repurchase (or similar) transactions that are
entered into in accordance with customary market terms for transactions of such
type to repurchase the Shares, in each case, to the extent that, after giving
effect to such transactions, the aggregate number of Shares repurchased during
the term of the Transaction pursuant to all transactions described in this
proviso would not exceed 20% of the number of Shares outstanding as of the Trade
Date, as determined by the Calculation Agent” at the end of such
Section 11.2(e)(v), and (B) Section 12.1(d) of the Equity Definitions is hereby
amended by replacing “10%” with “20%” in the third line thereof; (iv) any
acquisition by Counterparty and/or its subsidiaries where the aggregate
consideration does not exceeds 35% of the market capitalization of Counterparty
as of the date of such acquisition shall not constitute a Potential Adjustment
Event; and (v) any adjustment to the Cap Price made pursuant to this
Section 10(z) 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).

 

(aa)[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.

 

(bb)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”. ]

 

(cc)Delivery of Tax Certificates. For purposes of Section 4(a)(i) of the
Agreement, on or prior to the Trade Date and at any other time reasonably
requested by Dealer, Counterparty shall have delivered to Dealer a properly
completed Internal Revenue Service Form W-9.

 

(dd)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 U.S. Internal
Revenue Code of 1986, as amended (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.

 

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(ee)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 www.isda.org, 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.

 

(ff)Payee Tax Representations. For purposes of Section 3(f) of the Agreement,
Counterparty represents that it is a “U.S. person” (as that term is used in
section 1.1441-4(a)(3)(ii) of the U.S. Treasury Regulations) for U.S. federal
income tax purposes and “exempt” within the meaning of sections 1.6041-3(p) and
1.6049-4(c) of the U.S. Treasury Regulations from information reporting on U.S.
Internal Revenue Service Form 1099 and backup withholding.

 

(gg)CARES Act. Counterparty acknowledges that the Transaction may constitute a
purchase of its equity securities. Counterparty further acknowledges that,
pursuant to the provisions of the Coronavirus Aid, Relief and Economic Security
Act (the “CARES Act”), the Counterparty would be required to agree to certain
time-bound restrictions on its ability to purchase its equity securities 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 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 for the purpose of providing liquidity to the financial system
(together with loans, loan guarantees or direct loans under section 4003(b) of
the CARES Act, “Governmental Financial Assistance”). Accordingly, Counterparty
represents and warrants that it has not applied for, and has no intention to
apply for prior to the termination or settlement of this Transaction
Governmental Financial Assistance under any governmental program or facility
that (a) is established under the CARES Act or the Federal Reserve Act, as
amended, and (b) requires, as a condition of such Governmental Financial
Assistance, that the Counterparty 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.

 

[(hh)U.S. Resolution Stay Provisions.

 

(i)Recognition of the U.S. Special Resolution Regimes.

 

(A)In the event that [          ] becomes subject to a proceeding under (i) the
Federal Deposit Insurance Act and the regulations promulgated thereunder or
(ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act
and the regulations promulgated thereunder (a “U.S. Special Resolution Regime”)
the transfer from [          ] of this Confirmation, and any interest and
obligation in or under, and any property securing, this Confirmation, will be
effective to the same extent as the transfer would be effective under the U.S.
Special Resolution Regime if this Confirmation, and any interest and obligation
in or under, and any property securing, this Confirmation were governed by the
laws of the United States or a state of the United States.

 

(B)In the event that [          ] or an Affiliate becomes subject to a
proceeding under a U.S. Special Resolution Regime, any Default Rights (as
defined in 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable (“Default Right”))
under this Confirmation that may be exercised against [          ] are permitted
to be exercised to no greater extent than such Default Rights could be exercised
under the U.S. Special Resolution Regime if this Confirmation were governed by
the laws of the United States or a state of the United States.

 

30

 

 

(ii)Limitation on Exercise of Certain Default Rights Related to an Affiliate’s
Entry Into Insolvency Proceedings. Notwithstanding anything to the contrary in
this Confirmation, [          ] and Counterparty expressly acknowledge and agree
that:

 

(A)Counterparty shall not be permitted to exercise any Default Right with
respect to this Confirmation or any Affiliate Credit Enhancement that is
related, directly or indirectly, to an Affiliate of [          ] becoming
subject to receivership, insolvency, liquidation, resolution, or similar
proceeding (an “Insolvency Proceeding”), except to the extent that the exercise
of such Default Right would be permitted under the provisions of 12 C.F.R.
252.84, 12 C.F.R. 47.5 or 12 C.F.R. 382.4, as applicable; and

 

(B)Nothing in this Confirmation shall prohibit the transfer of any Affiliate
Credit Enhancement, any interest or obligation in or under such Affiliate Credit
Enhancement, or any property securing such Affiliate Credit Enhancement, to a
transferee upon or following an Affiliate of [          ] becoming subject to an
Insolvency Proceeding, unless the transfer would result in the Counterparty
being the beneficiary of such Affiliate Credit Enhancement in violation of any
law applicable to the Counterparty.

 

(iii)U.S. Protocol. If Counterparty has previously adhered to, or subsequently
adheres to, the ISDA 2018 U.S. Resolution Stay Protocol as published by the
International Swaps and Derivatives Association, Inc. as of July 31, 2018 (the
“ISDA U.S. Protocol”), the terms of such protocol shall be incorporated into and
form a part of this Confirmation and the terms of the ISDA U.S. Protocol shall
supersede and replace the terms of this Section 10(hh). For purposes of
incorporating the ISDA U.S. Protocol, [          ] shall be deemed to be a
Regulated Entity, Counterparty shall be deemed to be an Adhering Party, and this
Confirmation shall be deemed to be a Protocol Covered Agreement. Capitalized
terms used but not defined in this paragraph shall have the meanings given to
them in the ISDA U.S. Protocol.

 

(iv)Preexisting In-Scope Agreements. [          ] and Counterparty agree that to
the extent there are any outstanding “in-scope QFCs,” as defined in 12 C.F.R. §
252.82(d), that are not excluded under 12 C.F.R. § 252.88, between [          ]
and Counterparty that do not otherwise comply with the requirements of 12 C.F.R.
§ 252.2, 252.81–8 (each such agreement, a “Preexisting In-Scope Agreement”),
then each such Preexisting In-Scope Agreement is hereby amended to include the
foregoing provisions in this Section 10(hh), with references to “this
Confirmation” being understood to be references to the applicable Preexisting
In-Scope Agreement.

 

For the purposes of this Section 10(hh), “Affiliate” is defined in, and shall be
interpreted in accordance with, 12 U.S.C. § 1841(k), and “Credit Enhancement”
means any credit enhancement or credit support arrangement in support of the
obligations of [          ] under or with respect to this Confirmation,
including any guarantee, collateral arrangement (including any pledge, charge,
mortgage or other security interest in collateral or title transfer
arrangement), trust or similar arrangement, letter of credit, transfer of margin
or any similar arrangement.]

 

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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
facsimile or e-mail.

 

 

  Very truly yours,             [Dealer]                 By:  
                                Authorized Signatory     Name:

 

[Signature Page to [Base][Additional] Capped Call Confirmation]

 

 

 

 

Accepted and confirmed
as of the Trade Date:

 

The Middleby Corporation           By:                                         
Authorized Signatory   Name:  

 

[Signature Page to [Base][Additional] Capped Call Confirmation]