Exhibit 10.1
[INSERT DEALER NAME] [INSERT DEALER ADDRESS] | TEL: [INSERT DEALER TELEPHONE
NUMBER]
Opening Transaction

     
To:
  NetApp, Inc.
495 East Java Drive
Sunnyvale, California 94089
 
   
A/C:
  [Insert Account Number]
 
   
From:
  [Insert Dealer Name]
 
   
Re:
  Convertible Bond Hedge Transaction
 
   
Ref. No:
  [Insert Reference Number]
 
   
Date:
  June 4, 2008

Dear Sir(s):
     The purpose of this communication (this “Confirmation”) is to set forth the
terms and conditions of the above-referenced transaction entered into on the
Trade Date specified below (the “Transaction”) between [          ] (“Dealer”)
and NetApp, Inc. (“Counterparty”). This communication constitutes a
“Confirmation” as referred to in the ISDA Master Agreement specified below.
     1. This Confirmation is subject to, and incorporates, the definitions and
provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000
Definitions”) and the definitions and provisions of the 2002 ISDA Equity
Derivatives Definitions (the “Equity Definitions”, and together with the 2000
Definitions, the “Definitions”), in each case as published by the International
Swaps and Derivatives Association, Inc. (“ISDA”). In the event of any
inconsistency between the 2000 Definitions and the Equity Definitions, the
Equity Definitions will govern. Certain defined terms used herein have the
meanings assigned to them in the Indenture to be dated as of June 10, 2008
between Counterparty and U.S. Bank National Association, as trustee (the
“Indenture”) relating to the USD1,100,000,000 principal amount of 1.75%
convertible senior notes due June 1, 2013 (the “Convertible Securities”). In the
event of any inconsistency between the terms defined in the Indenture and this
Confirmation, this Confirmation shall govern. For the avoidance of doubt,
references herein to sections of the Indenture are based on the draft of the
Indenture most recently reviewed by the parties at the time of execution of this
Confirmation. If any relevant sections of the Indenture are changed, added or
renumbered between the execution of this Confirmation and the execution of the
Indenture, the parties will amend this Confirmation in good faith to preserve
the economic intent of the parties, as evidenced by such draft of the Indenture.
The parties further acknowledge that 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 following its execution, any such amendment will be
disregarded for purposes of this Confirmation unless the parties agree otherwise
in writing. The Transaction is subject to early unwind if the closing of the
Convertible Securities is not consummated for any reason, as set forth below in
Section 8(k).
     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.
     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 be subject to an agreement (the “Agreement”) in
the form of the 1992 ISDA Master Agreement (Multicurrency—Cross

 

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Border) as if Dealer and Counterparty had executed an agreement in such form on
the date hereof (but without any Schedule except for (i) the election of Loss
and Second Method, New York law (without reference to its choice of laws
doctrine, other than Title 14 of the New York General Obligations Law) as the
governing law and US Dollars (“USD”) as the Termination Currency and (ii) the
replacement of the word “third” in the last line of Section 5(a)(i) of the
Agreement with the word “second.”
     All provisions contained in, or incorporated by reference to, the Agreement
will govern this Confirmation except as expressly modified herein. In the event
of any inconsistency between this Confirmation and either the Definitions or the
Agreement, this Confirmation shall govern.
     The Transaction hereunder shall be the sole Transaction under 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 Transaction constitutes a Share Option Transaction for purposes of
the Equity Definitions. The terms of the particular Transaction to which this
Confirmation relates are as follows:

          General Terms:    
 
       
 
  Trade Date:   June 4, 2008
 
       
 
  Effective Date:   The closing date of the initial issuance of the Convertible
Securities.
 
       
 
  Option Style:   Modified American, as described under “Procedures for
Exercise” below.
 
       
 
  Option Type:   Call
 
       
 
  Seller:   Dealer
 
       
 
  Buyer:   Counterparty
 
       
 
  Shares:   The Common Stock of Counterparty, par value USD0.001 (Ticker Symbol:
“NTAP”).
 
       
 
  Number of Options:   The number of Convertible Securities in denominations of
USD1,000 principal amount issued by Counterparty on the closing date for the
initial issuance of the Convertible Securities; provided that the Number of
Options shall be automatically increased as of the date of exercise by Goldman,
Sachs & Co. of the Initial Purchasers’ option pursuant to Section 2 of the
Purchase Agreement dated as of June 4, 2008, between Counterparty and Goldman,
Sachs & Co. and Morgan Stanley & Co. Incorporated as representatives of the
Initial Purchasers party thereto (the “Purchase Agreement”) by the number of
Convertible Securities in denominations of USD1,000 principal amount issued
pursuant to such exercise (such Convertible Securities, the “Additional
Convertible Securities”). For the avoidance of doubt, the Number of Options
outstanding shall be reduced by each exercise of Options hereunder.

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  Applicable Percentage:   [  ]%
 
       
 
  Option Entitlement:   As of any date, a number of Shares per Option equal to
the “Conversion Rate” (as defined in the Indenture, but without regard to any
adjustments to the Conversion Rate pursuant to Sections 6.02(h) or 6.03 of the
Indenture).
 
       
 
  Strike Price:   As of any date, an amount in USD, rounded to the nearest cent
(with 0.5 cents being rounded upwards), equal to USD1,000 divided by the Option
Entitlement as of such date.
 
       
 
  Number of Shares:   The product of the Number of Options and the Option
Entitlement and the Applicable Percentage.
 
       
 
  Premium:   USD[          ] (Premium per Option USD[          ]); provided that
if the Number of Options is increased pursuant to the proviso to the definition
of “Number of Options” above, an additional Premium equal to the product of the
number of Options by which the Number of Options is so increased and the Premium
per Option shall be paid on the Additional Premium Payment Date.
 
       
 
  Premium Payment Date:   The Effective Date
 
       
 
  Additional Premium Payment Date:   The closing date for the purchase and sale
of the Additional Convertible Securities.
 
       
 
  Exchange:   NASDAQ Global Select Market
 
       
 
  Related Exchange:   All Exchanges located in the United States.
 
       
Procedures
  for Exercise:    
 
       
 
  Exercise Date:   Each Conversion Date.
 
       
 
  Conversion Date:   Each “Conversion Date” (as defined in the Indenture)
occurring during the Exercise Period for Convertible Securities each in
denominations of USD1,000 principal amount, the “Relevant Convertible
Securities” for such Conversion Date).
 
       
 
  Exercise Period:   The period from and excluding the Effective Date to and
including the Expiration Date.
 
       
 
  Expiration Date:   The earlier of (i) the last day on which any Convertible
Securities remain outstanding and (ii) the “Scheduled Trading Day” (as defined
in the Indenture) immediately preceding the “Maturity Date” (as defined in the
Indenture).
 
       
 
  Automatic Exercise on Conversion Dates:   Applicable; and means that on each
Conversion Date, a number of Options equal to the number of Relevant Convertible
Securities for such Conversion Date in denominations of USD1,000 principal
amount shall be automatically exercised.
 
       
 
  Notice Deadline:   In respect of any exercise of Options hereunder,
12:00 P.M., New York City time, on the Scheduled

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      Trading Day immediately preceding the first Scheduled Trading Day (as
defined in the Indenture) of the relevant “Observation Period” (as defined in
the Indenture) (such day and time, the “Notice Deadline”); provided that,
notwithstanding the foregoing, such notice (and the related automatic exercise
of such Options) shall be effective if given after the relevant Notice Deadline
but prior to 5:00 P.M. New York City time on the fifth Scheduled Trading Day of
such Observation Period, in which case the Calculation Agent shall have the
right to adjust the Delivery Obligation as appropriate to reflect the additional
costs (including, but not limited to, hedging mismatches and market losses) and
reasonable expenses incurred by Dealer in connection with its hedging activities
(including the unwinding of any hedge position) as a result of its not having
received such notice prior to the Notice Deadline; and provided further that in
the case of any exercise of Options hereunder in connection with the conversion
of any Relevant Convertible Securities for any Conversion Dates occurring during
the period from and including the 25th Scheduled Trading Day (as defined in the
Indenture) prior to the Maturity Date to and including the Expiration Date (the
“Final Conversion Period”), the Notice Deadline shall be 12:00 P.M., New York
City time, on the Scheduled Trading Day (as defined in the Indenture)
immediately following the relevant Exercise Date.
 
       
 
  Notice of Exercise:   Notwithstanding anything to the contrary in the Equity
Definitions, Dealer shall have no obligation to make any payment or delivery in
respect of any exercise of Options hereunder unless Counterparty notifies Dealer
in writing prior to 12:00 P.M., New York City time, on the Notice Deadline
(subject to the first proviso under Notice Deadline above) in respect of such
exercise, of (i) the number of Relevant Convertible Securities being converted
on the related Conversion Date, (ii) the scheduled settlement date under the
Indenture for the Relevant Convertible Securities for such Conversion Date and
(iii) the first Scheduled Trading Day of the relevant Observation Period;
provided that in the case of any exercise of Options in connection with the
conversion of any Relevant Convertible Securities for any Conversion Date
occurring during the Final Conversion Period, the content of such notice shall
be as set forth in clauses (i) and (ii) above. For the avoidance of doubt, if
Counterparty fails to give such notice prior to 12:00 P.M., New York City time,
on the Notice Deadline (subject to the first proviso under Notice Deadline
above) in respect of any exercise of Options hereunder, Dealer’s obligation to
make any payment or delivery in respect of such exercise shall

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      be permanently extinguished, and late notice shall not cure such failure.

             
 
  Dealer’s Telephone Number and Telex and/or Facsimile Number and Contact
Details for purpose of Giving Notice:   To:   [     ]
 
          [     ]
 
          [     ]
 
           
 
      Attn:   [     ]
 
          [     ]
 
      Telephone:   [     ]
 
      Facsimile:   [     ]
 
           
 
      With a copy to:    
 
           
 
      Attn:   [     ]
 
          [     ]
 
      Telephone:   [     ]
 
      Facsimile:   [     ]

          Settlement Terms:    
 
       
 
  Settlement Date:   For any Exercise Date, the settlement date for the Shares
to be delivered in respect of the Relevant Convertible Securities for the
relevant Conversion Date under the terms of the Indenture; provided that the
Settlement Date shall not be prior to the Exchange Business Day immediately
following the date Counterparty provides the Notice of Convertible Obligation
prior to 12:00 P.M., New York City time.
 
       
 
  Delivery Obligation:   In lieu of the obligations set forth in Sections 8.1
and 9.1 of the Equity Definitions, and subject to “Notice of Exercise” above, in
respect of an Exercise Date, Dealer will deliver to Counterparty on the related
Settlement Date (the “Delivery Obligation”), a number of Shares equal to the
product of the Applicable Percentage and the aggregate number of Shares (the
“Deliverable Shares”) included in the “Settlement Amount” (as defined in the
Indenture) pursuant to clause (ii) of the definition of “Daily Settlement
Amount” in the Indenture, if any, that Counterparty is obligated to deliver to
the holder(s) of the Relevant Convertible Securities for such Conversion Date
pursuant to Section 6.01(c) of the Indenture (except that such number of
Deliverable Shares shall be determined without taking into consideration any
rounding pursuant to Section 6.02(d) of the Indenture or any election by
Counterparty to deliver to holders cash in lieu of Shares pursuant to Section
6.02(f) of the Indenture, and shall be rounded down to the nearest whole number)
and cash in lieu of fractional Shares, if any, resulting from such rounding
(collectively, the “Convertible Obligation”); provided that the

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      Delivery Obligation shall be determined excluding any Shares (and cash in
lieu of fractional Shares, if any) that Counterparty is obligated to deliver to
holder(s) of the Relevant Convertible Securities as a direct or indirect result
of any adjustments to the Conversion Rate pursuant to Sections 6.02(h) and 6.03
of the Indenture and any interest payment that Counterparty is (or would have
been) obligated to deliver to holder(s) of the Relevant Convertible Securities
for such Conversion Date; provided further that to the extent Counterparty
elects to deliver to holders an amount of cash per $1,000 principal amount of
Relevant Convertible Securities in lieu of Shares pursuant to Section 6.02(f) of
the Indenture (the “Cash Amount”), the number of Shares included in the Delivery
Obligation shall be capped so that such number does not exceed the product of
the Applicable Percentage and the sum of (x) the number of Deliverable Shares
(after giving effect to Counterparty’s election to deliver the Cash Amount in
lieu of Shares) and (y) a number of Shares equal to the Cash Amount divided by
the “Daily VWAP” (as defined in the Indenture) on the last day of the relevant
Observation Period; and provided further that if such exercise relates to the
conversion of Relevant Convertible Securities in connection with which holders
thereof are entitled to receive additional Shares (and cash in lieu of
fractional Shares) pursuant to the adjustments to the Conversion Rate set forth
in Section 6.03 of the Indenture, then, notwithstanding the foregoing, the
Delivery Obligation shall include such additional Shares (and cash in lieu of
fractional Shares), except that the Delivery Obligation shall be capped so that
the product of the Applicable Percentage and the value of the Delivery
Obligation (with the value of any Shares included in the Delivery Obligation
determined by the Calculation Agent using the Daily VWAP on the last day of the
relevant Observation Period) does not exceed the amount (the “Makewhole Cap
Amount”) as determined by the Calculation Agent that would be payable by Dealer
pursuant to Section 6 of the Agreement if such Conversion Date were an Early
Termination Date resulting from an Additional Termination Event with respect to
which the Transaction (except that, for purposes of determining such amount
(x) the Number of Options shall be deemed to be equal to the number of Options
exercised on such Exercise Date and (y) such amount payable will be determined
as if Section 6.03 of the Indenture were deleted) was the sole Affected
Transaction and Counterparty was the sole Affected Party (determined without
regard to Section 8(c) of this Confirmation). For the avoidance of doubt, the
Calculation Agent shall determine the Makewhole Cap Amount in good faith and in
a commercially

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      reasonable manner, including without limitation by making reference to the
bid-side market volatility of the Shares immediately prior to the Makewhole
Event Time. The “Makewhole Event Time” means the time of the first public
announcement by any person of a firm intention to engage in a transaction or
other event (whether or not subsequently amended) that leads to the transaction
or event that results in converting holders of the Relevant Convertible
Securities being so entitled to receive to receive additional Shares (and cash
in lieu of fractional shares). In addition, for the avoidance of doubt, if the
“Daily Conversion Value” (as defined in the Indenture) for every “VWAP Trading
Day” (as defined in the Indenture) occurring in the relevant Observation Period
is less than or equal to USD 50, Dealer will have no delivery obligation
hereunder in respect of the related Exercise Date.
 
       
 
  Notice of Convertible Obligation:   No later than the Exchange Business Day
immediately following the last day of the relevant Observation Period,
Counterparty shall give Dealer notice of the final number of Shares (and cash in
lieu of fractional Shares, if any) comprising the relevant Convertible
Obligation; provided that, with respect to any Exercise Date occurring during
the Final Conversion Period, Counterparty may provide Dealer with a single
notice of the aggregate number of Shares (and cash in lieu of fractional Shares)
comprising the Convertible Obligations for all Exercise Dates occurring during
such period (it being understood, for the avoidance of doubt, that the
requirement of Counterparty to deliver such notice shall not limit
Counterparty’s obligations with respect to Notice of Exercise, as set forth
above, in any way).
 
       
 
  Other Applicable Provisions:   To the extent Dealer is obligated to deliver
Shares hereunder, the provisions of Sections 9.1(c), 9.8, 9.9, 9.10 and 9.11 of
the Equity Definitions will be applicable as if “Physical Settlement” applied to
the Transaction; provided that the Representation and Agreement contained in
Section 9.11 of the Equity Definitions shall be modified by excluding any
representations therein relating to restrictions, obligations, limitations or
requirements under applicable securities laws that exist as a result of the fact
that Counterparty is the issuer of the Shares.
 
       
 
  Restricted Certificated Shares:   Notwithstanding anything to the contrary in
the Equity Definitions, Dealer may, in whole or in part, deliver Shares in
certificated form representing the Number of Shares to be Delivered to
Counterparty in lieu of delivery through the Clearance System.
 
        Adjustments:    
 
       
 
  Method of Adjustment:   Notwithstanding Section 11.2 of the Equity

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      Definitions, upon the occurrence of any event or condition set forth in
Section 6.02(a), (b), (c), (d) or (e) of the Indenture (each an “Adjustment
Event”), the Calculation Agent shall make the corresponding adjustment in
respect of any one or more of the Number of Options, the Option Entitlement and
any other variable relevant to the exercise, settlement or payment of the
Transaction, to the extent an analogous adjustment is made under the Indenture.
Promptly upon the occurrence of any Adjustment Event Counterparty shall notify
the Calculation Agent of such Adjustment Event; and once the adjustments to be
made to the terms of the Indenture and the Convertible Securities in respect of
such Adjustment Event have been determined, Counterparty shall promptly notify
the Calculation Agent in writing of the details of such adjustments. The
Calculation Agent shall, promptly after receiving such notice, make any
corresponding adjustments to the terms of the Transaction and promptly notify
Dealer and Counterparty thereof.
 
        Extraordinary Events:    
 
       
 
  Merger Events:   Notwithstanding Section 12.1(b) of the Equity Definitions, a
“Merger Event” means the occurrence of any event or condition set forth in
Section 6.09 or 8.02 of the Indenture.
 
       
 
  Consequences of Merger Events:   Notwithstanding Section 12.2 of the Equity
Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall
make the corresponding adjustment in respect of any adjustment under the
Indenture to any one or more of the nature of the Shares, the Number of Options,
the Option Entitlement and any other variable relevant to the exercise,
settlement or payment for the Transaction, to the extent an analogous adjustment
is made under the Indenture in respect of such Merger Event; provided that such
adjustment shall be made without regard to any adjustment to the Conversion Rate
for the issuance of additional Shares as set forth in Sections 6.02(h) and 6.03
of the Indenture.
 
       
 
  Notice of Merger Consideration and Consequences:   Upon the occurrence of a
Merger Event that causes the Shares to be converted into the right to receive
more than a single type of consideration (determined based in part upon any form
of stockholder election), Counterparty shall reasonably promptly (but in any
event prior to the Merger Date) notify the Calculation Agent of (i) the type and
amount of consideration that a holder of Shares would have been entitled to in
the case of reclassifications, consolidations, mergers, sales or transfers of
assets or other transactions that cause Shares to be converted into the right to
receive more than a single type of consideration, (ii) the weighted average of
the types and amounts of

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      consideration received by the holders of Shares that affirmatively make
such an election (or if no holders of Shares affirmatively make such an
election, the types and amount of consideration actually received by such
holders), and (iii) the details of the adjustment made under the Indenture in
respect of such Merger Event.
 
        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 such exchange or quotation system, such exchange or quotation
system shall thereafter be deemed to be the Exchange.
 
        Additional Disruption Events:    
 
       
 
  (a) 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 announcement or
statement of the formal or informal interpretation” and (ii) immediately
following the word “Transaction” in clause (X) thereof, adding the phrase “in
the manner contemplated by Hedging Party on the Trade Date.”
 
       
 
  (b) Failure to Deliver:   Applicable
 
       
 
  (c) Insolvency Filing:   Applicable
 
       
 
  (d) Hedging Disruption:   Applicable
 
        Hedging Party:   Dealer
 
        Determining Party:   Dealer
 
        Non-Reliance:   Applicable
 
        Agreements and Acknowledgments Regarding Hedging Activities:  
Applicable
 
        Additional Acknowledgments:   Applicable

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  3. Calculation Agent:   4. Dealer. All determinations made by the Calculation
Agent shall be made in good faith and in a commercially reasonable manner.
Following any calculation by the Calculation Agent hereunder, upon a prior
written request by Counterparty, the Calculation Agent will provide to
Counterparty by e-mail to the e-mail address provided by Counterparty in such
prior 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 calculation. No transferee of Dealer with respect to any Options in
accordance with the terms of this Confirmation shall act as Calculation Agent
with respect to such transferred Options without the prior consent of
Counterparty, such consent not to be unreasonably withheld.

4. Account Details:
     Dealer Payment Instructions:
          [          ]
     Counterparty Payment Instructions:
          To be provided by Counterparty.
5. Offices:
     The Office of Dealer for the Transaction is:
          [          ]
     The Office of Counterparty for the Transaction is:
          [          ]
6. Notices: For purposes of this Confirmation:

          (a)   Address for notices or communications to Counterparty:
 
       
 
  To:   NetApp, Inc.
495 East Java Drive
Sunnyvale, CA 94089
 
  Attn:   Treasurer
 
       
 
  Telephone:   (408) 822-6000
 
  Facsimile:   (408) 822-4501
 
       
 
  With a copy to:   NetApp, Inc.
495 East Java Drive
Sunnyvale, CA 94089  
 
       
 
  Attn:   General Counsel
 
       
 
  Telephone:   (408) 822-6000
 
  Facsimile:   (408) 822-4501
 
        (b)   Address for notices or communications to Dealer:
 
       
 
  To:   [          ]
 
  Attn:   [          ]
 
      [          ]
 
  Telephone:   [          ]
 
  Facsimile:   [          ]
 
       
 
  With a copy to:    

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  Attn:   [          ]
 
      [          ]
 
  Telephone:   [          ]
 
  Facsimile:   [          ]

     7. Representations, Warranties and Agreements:
     (a) In addition to the representations and warranties in the Agreement and
those contained elsewhere herein, Counterparty represents and warrants to and
for the benefit of, and agrees with, Dealer as follows:
     (i) On the Trade Date, (A) none of Counterparty and its executive officers
and directors is aware of any material nonpublic information regarding
Counterparty or the Shares and (B) all reports and other documents filed by
Counterparty with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) when considered
as a whole (with the more recent such reports and documents deemed to amend
inconsistent statements contained in any earlier such reports and documents), do
not contain any untrue statement of a material fact or any omission of a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading.
     (ii) (A) On the Trade Date, the Shares or securities that are convertible
into, or exchangeable or exercisable for Shares, are not, and shall not be,
subject to a “restricted period,” as such term is defined in Regulation M under
the Exchange Act (“Regulation M”) and (B) Counterparty shall not engage in any
“distribution,” as such term is defined in Regulation M, other than a
distribution meeting the requirements of the exceptions set forth in sections
101(b)(10) and 102(b)(7) of Regulation M, until the second Exchange Business Day
immediately following the Trade Date.
     (iii) Without limiting the generality of Section 13.1 of the Equity
Definitions, Counterparty acknowledges that neither Dealer nor any of its
affiliates is making any representations or warranties or taking a position or
expressing any view with respect to the treatment of the Transaction under any
accounting standards, including FASB Statements 128, 133 (as amended), 149 or
150, EITF Issue No. 00-19, 01-6, 03-6 or 07-5 (or any successor issue
statements) or under the FASB’s Liabilities & Equity Project.
     (iv) Without limiting the generality of Section 3(a)(iii) of the Agreement,
the Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange
Act.
     (v) Prior to the Trade Date, Counterparty shall deliver to Dealer a
resolution of Counterparty’s board of directors authorizing the Transaction and
such other certificate or certificates as Dealer shall reasonably request.
     (vi) Counterparty is not entering into this Confirmation to create actual
or apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to otherwise manipulate the price of the Shares (or
any security convertible into or exchangeable for Shares) or to otherwise
violate the Exchange Act.
     (vii) Counterparty is not, and after giving effect to the transactions
contemplated hereby will not be, required to register as, an “investment
company” as such term is defined in the Investment Company Act of 1940, as
amended.
     (viii) On each of the Trade Date, the Premium Payment Date and the
Additional Premium Payment Date, if any, Counterparty is not “insolvent” (as
such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11
of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be
able to purchase the Shares hereunder in compliance with the laws of the
jurisdiction of Counterparty’s incorporation.
     (b) Each of Dealer and Counterparty agrees and represents that it is an
“eligible contract participant” as defined in Section 1a(12) of the U.S.
Commodity Exchange Act, as amended.

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     (c) Each of Dealer and Counterparty acknowledges that the offer and sale of
the Transaction to it is intended to be exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act”), by virtue of
Section 4(2) thereof. Accordingly, Counterparty represents and warrants to
Dealer that (i) it has the financial ability to bear the economic risk of its
investment in the Transaction and is able to bear a total loss of its investment
and its investments in and liabilities in respect of the Transaction, which it
understands are not readily marketable, are not disproportionate to its net
worth, and it is able to bear any loss in connection with the Transaction,
including the loss of its entire investment in the Transaction, (ii) it is an
“accredited investor” as that term is defined in Regulation D as promulgated
under the Securities Act, (iii) it is entering into the Transaction for its own
account and without a view to the distribution or resale thereof, (iv) the
assignment, transfer or other disposition of the Transaction has not been and
will not be registered under the Securities Act and is restricted under this
Confirmation, the Securities Act and state securities laws, and (v) its
financial condition is such that it has no need for liquidity with respect to
its investment in the Transaction and no need to dispose of any portion thereof
to satisfy any existing or contemplated undertaking or indebtedness and is
capable of assessing the merits of and understanding (on its own behalf or
through independent professional advice), and understands and accepts, the
terms, conditions and risks of the Transaction.
     (d) Each of Dealer and Counterparty agrees and acknowledges that Dealer is
a “financial institution,” “swap participant” and/or “financial participant”
within the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the
Bankruptcy Code. The parties hereto further agree and acknowledge (A) that this
Confirmation is (i) a “securities contract,” as such term is defined in
Section 741(7) of the Bankruptcy Code, with respect to which each payment and
delivery hereunder is a “settlement payment,” as such term is defined in
Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term
is defined in Section 101(53B) of the Bankruptcy Code, with respect to which
each payment and delivery hereunder is a “transfer,” as such term is defined in
Section 101(54) of the Bankruptcy Code, and (B) that Dealer is 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.
     (e) Counterparty shall deliver to Dealer (i) an incumbency certificate,
dated as of the Trade Date, of Counterparty in customary form and (ii) an
opinion of counsel, dated as of the Trade Date and reasonably acceptable to
Dealer in form and substance, with respect to due incorporation, existence and
good standing of the Counterparty in Delaware, its qualifications as a foreign
corporation and good standing in California, the due authorization, execution
and delivery of the Confirmation, and the absence of conflict of the execution
and delivery of the Confirmation with any material agreement required to be
filed as any exhibit to the Counterparty’s Annual Report on Form 10-K and the
Counterparty’s charter documents.
     (f) Counterparty represents and warrants that it has received, read and
understands the OTC Options Risk Disclosure Statement and a copy of the most
recent disclosure pamphlet prepared by The Options Clearing Corporation entitled
“Characteristics and Risks of Standardized Options”.
     Each party acknowledges and agrees to be bound by the Conduct Rules of the
National Association of Securities Dealers, Inc. applicable to transactions in
options, and further agrees not to violate the position and exercise limits set
forth therein.
     8. Other Provisions:
     (a) Right to Extend. Dealer may postpone any Exercise Date or Settlement
Date or any other date of valuation or delivery by Dealer, with respect to some
or all of the relevant Options (in which event the Calculation Agent shall make
appropriate adjustments to the Delivery Obligation), if Dealer determines, in
its reasonable discretion, that such extension is reasonably necessary or
appropriate to preserve Dealer’s hedging or hedge unwind activity hereunder in
light of existing liquidity conditions in the cash market, the stock borrow
market or other relevant market or to enable Dealer to effect purchases of
Shares in connection with its hedging, hedge unwind or settlement activity
hereunder in a manner that would, if Dealer were Counterparty or an affiliated
purchaser of Counterparty, be in compliance with applicable legal, regulatory or
self-regulatory requirements, or with related policies and procedures applicable
to Dealer.

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     (b) Additional Termination Events. The occurrence of (i) an event of
default with respect to Counterparty under the terms of the Convertible
Securities as set forth in Section 7.01 of the Indenture, or (ii) an Amendment
Event shall be an Additional Termination Event with respect to which the
Transaction is the sole Affected Transaction and Counterparty is the sole
Affected Party, and Dealer shall be the party entitled to designate an Early
Termination Date pursuant to Section 6(b) of the Agreement and to determine the
amount payable pursuant to Section 6(e) of the Agreement.
     “Amendment Event” means that Counterparty amends, modifies, supplements or
obtains a waiver in respect of any term of the Indenture or the Convertible
Securities governing the principal amount, coupon (but only if such event
results in a decrease to such coupon), maturity, the amount payable upon a
repurchase obligation of Counterparty, upon a fundamental change, any term
relating to conversion of the Convertible Securities (including changes to the
conversion price, conversion settlement dates or conversion conditions), or any
term that would require consent of the holders of not less than 100% of the
principal amount of the Convertible Securities to amend, in each case without
the prior consent of Dealer.
     (c) Alternative Calculations and Payment on Early Termination and on
Certain Extraordinary Events. If Dealer shall owe Counterparty any amount
pursuant to Section 12.2 of the Equity Definitions or “Consequences of Merger
Events” above, or Section 12.6, 12.7 or 12.9 of the Equity Definitions (except
in the event of a Merger Event, Insolvency or Nationalization, in each case in
which the consideration or proceeds to be paid to holders of Shares consists
solely of cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the
event of an Event of Default in which Counterparty is the Defaulting Party or a
Termination Event in which Counterparty is the Affected Party, that resulted
from an event or events within Counterparty’s control) (a “Payment Obligation”),
Counterparty shall have the right, in its sole discretion, to require Dealer to
satisfy any such Payment Obligation by the Share Termination Alternative (as
defined below) by giving irrevocable telephonic notice to Dealer, confirmed in
writing within one Scheduled Trading Day, between the hours of 9:00 A.M. and
4:00 P.M., New York City time, on the Merger Date, Announcement Date or Early
Termination Date, as applicable (“Notice of Share Termination”). If no Notice of
Share Termination is received by Dealer within the time specified in the
preceding sentence, Dealer shall have the right, in its sole discretion, to
satisfy any Payment Obligation by the Share Termination Alternative by promptly
giving Counterparty a Notice of Share Termination. Upon delivery of a Notice of
Share Termination by either party, the following provisions shall apply on the
Scheduled Trading Day immediately following the Merger Date, Announcement Date
or Early Termination Date, as applicable:

     
Share Termination Alternative:
  Applicable and means that Dealer shall deliver to Counterparty the Share
Termination Delivery Property on the date on which the Payment Obligation would
otherwise be due pursuant to “Consequences of Merger Events” above or
Section 12.2, 12.6, 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii)
of the Agreement, as applicable (the “Share Termination Payment Date”), in
satisfaction of the Payment Obligation.
 
   
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 the aggregate amount 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.
 
   
Share Termination Delivery Unit:
  In the case of a Termination Event, Event of Default, Delisting or Additional
Disruption Event, one Share or, in the case of an Insolvency, Nationalization or
Merger Event, one Share or a unit

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  consisting of the number or amount of each type of 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
Insolvency, Nationalization or Merger Event. If such Insolvency, Nationalization
or Merger Event involves a choice of consideration 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 of the Equity Definitions will be applicable as if “Physical
Settlement” applied to the Transaction, except that all references to “Shares”
shall be read as references to “Share Termination Delivery Units”; provided that
the Representation and Agreement contained in Section 9.11 of the Equity
Definitions shall be modified by excluding any representations therein relating
to restrictions, obligations, limitations or requirements under applicable
securities laws as a result of the fact that Counterparty is the issuer of any
Share Termination Delivery Units (or any part thereof).

     (d) Disposition of Hedge Shares. Counterparty hereby agrees that if, in the
good faith reasonable judgment of Dealer or Counterparty, based on the advice of
counsel, the Shares (the “Hedge Shares”) acquired by Dealer for the purpose of
hedging its obligations pursuant to the Transaction cannot be sold in the U.S.
public market by Dealer without registration under the Securities Act,
Counterparty shall, at its election: (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 to cover the resale of such
Hedge Shares and (A) enter into an agreement, in form and substance satisfactory
to Dealer, substantially in the form of an underwriting agreement for
underwritten follow-on offerings of equity securities of companies of comparable
size, maturity and lines of business, (B) provide accountant’s “comfort” letters
in customary form for underwritten follow-on offerings of equity securities,
(C) provide disclosure opinions of nationally recognized outside counsel to
Counterparty as are customarily requested in connection with underwritten
follow-on offerings of equity securities of companies of comparable size,
maturity and lines of business, (D) provide other customary opinions,
certificates and closing documents customary in form for underwritten follow-on
offerings of equity securities of companies of comparable size, maturity and
lines of business and (E) afford Dealer a reasonable opportunity to conduct a
“due diligence” investigation with respect to Counterparty customary in scope
for underwritten follow-on offerings of equity securities of companies of
comparable size, maturity and lines of business; provided, however, that if
Dealer, in its sole commercially 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 Section 8(d) shall
apply at the election of Counterparty, provided that Dealer has given the
Counterparty reasonable notice of its determination and provided the
Counterparty with reasonable opportunity to satisfy Dealer’s concerns; (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
companies of comparable size, maturity and lines of business, in form and
substance reasonably satisfactory to Dealer, including customary
representations, covenants, blue sky and other governmental filings and/or
registrations, indemnities to Dealer, due diligence rights (for Dealer or any
designated buyer of the Hedge Shares from Dealer), opinions and certificates and
such other documentation as is customary for private placements agreements, all
reasonably acceptable to Dealer (in which case, the Calculation Agent shall make
any adjustments to the terms of the Transaction that are necessary, in its
reasonable judgment, to compensate Dealer for any discount from the public
market price of the Shares incurred on the sale of Hedge Shares in a private
placement); or (iii) purchase the Hedge Shares from Dealer at the “Daily VWAP”
(as defined in the Indenture, and determined as if the relevant Exchange
Business Days were VWAP Trading Days during the Observation Period, each as
defined in the Indenture) on such Exchange Business Days, and in the amounts,
requested by Dealer.
     (e) Repurchase and Conversion Rate Adjustment Notices. Counterparty shall,
at least two

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Exchange Business Days prior to any day on which Counterparty effects any
repurchase of Shares or consummates or otherwise engages in any transaction or
event (a “Conversion Rate Adjustment Event”) that could reasonably be expected
to lead to an increase in the Conversion Rate, give Dealer a written notice of
such repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on
such day if, following such repurchase or Conversion Rate Adjustment Event, the
Notice Percentage would reasonably be expected to be greater by 0.5% than the
Notice Percentage included in the immediately preceding Repurchase Notice (or,
in the case of the first such Repurchase Notice, greater than the Notice
Percentage as of the date hereof). The “Notice Percentage” as of any day is the
fraction, expressed as a percentage, the numerator of which is the number of
Shares underlying all Convertible Securities outstanding on such day and the
denominator of which is the number of Shares outstanding on such day. In the
event that Counterparty fails to provide Dealer with a Repurchase Notice on the
day and in the manner specified in this Section 8(e) then, to the extent
permitted by applicable law, Counterparty agrees to indemnify and hold harmless
Dealer, its affiliates and their respective directors, officers, employees,
agents and controlling persons (Dealer and each such person being an
“Indemnified Party”) from and against any and all losses, claims, damages and
liabilities (or actions in respect thereof), joint or several, to which such
Indemnified Party is subject under applicable securities laws, including without
limitation, Section 16 of the Exchange Act or under any state or federal law,
regulation or regulatory order, as a result of such failure. If for any reason
the foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold harmless any Indemnified Party, then Counterparty shall
contribute, to the maximum extent permitted by law, to the amount paid or
payable by the Indemnified Party as a result of such loss, claim, damage or
liability. In addition, Counterparty will reimburse any Indemnified Party for
any reasonable expenses (including reasonable counsel fees and expenses) as they
are incurred (after notice to Counterparty) in connection with the investigation
of, preparation for or defense or settlement of any pending or threatened claim
or any action, suit or proceeding arising therefrom, whether or not such
Indemnified Party is a party thereto and whether or not such claim, action, suit
or proceeding is initiated or brought by or on behalf of Counterparty. This
indemnity shall survive the completion of the Transaction contemplated by this
Confirmation and any assignment and delegation of the Transaction made pursuant
to this Confirmation or the Agreement shall inure to the benefit of any
permitted assignee of Dealer.
     (f) Transfer and Assignment. Either party may transfer any of its rights or
obligations under the Transaction with the prior written consent of the
non-transferring party, such consent not to be unreasonably withheld; provided
that Dealer may transfer or assign without any consent of Counterparty its
rights and obligations hereunder, in whole or in part, to any person, or any
person whose obligations would be guaranteed by a person, in either case, of
credit quality equivalent to Dealer’s (or its guarantor’s), but in no event with
a rating for its long term, unsecured and unsubordinated indebtedness of less
than A by Standard and Poor’s Rating Group, Inc. or its successor (“S&P”), and
less than A2 by Moody’s Investor Service, Inc. (“Moody’s”), or, if either S&P or
Moody’s ceases to rate such debt, less than an equivalent rating by a substitute
agency mutually agreed by Counterparty and Dealer. Dealer shall as soon as
reasonably practicable notify Counterparty of any such transfer or assignment.
If at any time at which (1) the Equity Percentage exceeds 9.0% or (2) Dealer,
Dealer Group (as defined below) or any person whose ownership position would be
aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group or any such
person, a “Dealer Person”) under Section 203 of the Delaware General Corporation
Law (the “DGCL Takeover Statute”) or other federal, state or local regulations
or regulatory orders applicable to ownership of Shares (“Applicable Laws”),
owns, beneficially owns, constructively owns, controls, holds the power to vote
or otherwise meets a relevant definition of ownership in excess of a number of
Shares equal to (x) the number of Shares that would give rise to reporting or
registration obligations or other requirements (including obtaining prior
approval by a state or federal regulator) of a Dealer Person under Applicable
Laws (including, without limitation, “interested stockholder” or “acquiring
person” status under the DGCL Takeover Statute) and with respect to which such
requirements have not been met or the relevant approval has not been received
minus (y) 1% of the number of Shares outstanding on the date of determination
(either such condition described in clause (1) or (2), an “Excess Ownership
Position”), Dealer, in its discretion, is unable to effect a transfer or
assignment to a third party after its commercially reasonable efforts on pricing
terms reasonably acceptable to Dealer such that an Excess Ownership Position no
longer exists, Dealer may designate any Scheduled Trading Day as an Early
Termination Date with respect to a portion (the “Terminated Portion”) of the
Transaction, such that an Equity Ownership Position no longer exists following
such partial termination. In the event that Dealer so designates an Early

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Termination Date with respect to a portion of the Transaction, a payment or
delivery shall be made pursuant to Section 6 of the Agreement and Section 8(c)
of this Confirmation as if (i) an Early Termination Date had been designated in
respect of a Transaction having terms identical to the Terminated Portion of the
Transaction, (ii) Counterparty were the sole Affected Party with respect to such
partial termination, (iii) such portion of the Transaction were the only
Terminated Transaction and (iv) Dealer were the party entitled to designate an
Early Termination Date pursuant to Section 6(b) of the Agreement and to
determine the amount payable pursuant to Section 6(e) of the Agreement. The
“Equity Percentage” as of any day is the fraction, expressed as a percentage,
(A) the numerator of which is the number of Shares that Dealer and any of its
affiliates subject to aggregation with Dealer for purposes of the “beneficial
ownership” test under Section 13 of the Exchange Act and all persons who may
form a “group” (within the meaning of Rule 13d-5(b)(1) under the Exchange Act)
with Dealer (collectively, “Dealer Group”) “beneficially own” (within the
meaning of Section 13 of the Exchange Act) without duplication on such day and
(B) the denominator of which is the number of Shares outstanding on such day. In
the case of a transfer or assignment by Counterparty of its rights and
obligations hereunder and under the Agreement, in whole or in part (any such
Options so transferred or assigned, the “Transfer Options”), to any party,
withholding of such consent by Dealer shall not be considered unreasonable if
such transfer or assignment does not meet the following reasonable conditions
that Dealer may impose:
     (A) With respect to any Transfer Options, Counterparty shall not be
released from its notice and indemnification obligations pursuant to Section
8(e) or any obligations under Section 2 (regarding Extraordinary Events) or 8(d)
of this Confirmation;
     (B) Any Transfer Options shall only be transferred or assigned to a third
party that is a U.S. person (as defined in the Internal Revenue Code of 1986, as
amended);
     (C) Such transfer or assignment shall be effected on terms, including any
reasonable undertakings by such third party (including, but not limited to,
undertakings 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 requested and
reasonably satisfactory to Dealer;
     (D) Dealer will not, as a result of such transfer and assignment, be
required to pay the transferee on any payment date an amount under
Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would
have been required to pay to Counterparty in the absence of such transfer and
assignment;
     (E) An Event of Default, Potential Event of Default or Termination Event
will not occur as a result of such transfer and assignment;
     (F) Without limiting the generality of clause (B), Counterparty shall have
caused the transferee to make such Payee Tax Representations and to provide such
tax documentation as may be reasonably requested by Dealer to permit Dealer to
determine that results described in clauses (D) and (E) will not occur upon or
after such transfer and assignment; and
     (G) Counterparty shall be responsible for all reasonable costs and
expenses, including reasonable counsel fees, incurred by Dealer in connection
with such transfer or assignment.
     (g) Staggered Settlement. Dealer may, by notice to Counterparty prior to
any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares
on one or more dates (each, a “Staggered Settlement Date”) or at two or more
times on the Nominal Settlement Date as follows:
     (i) in such notice, Dealer will specify to Counterparty the related
Staggered Settlement Dates (each of which will be on or prior to the 20th
Exchange Business Day after such Nominal Settlement Date, but not prior to the
earlier of the relevant Conversion Date and the first day of the relevant
Observation Period) or delivery times and how it will allocate the Shares it is
required to deliver under “Delivery Obligation” (above) among the Staggered
Settlement Dates or delivery times; and

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     (ii) the aggregate number of Shares that Dealer will deliver to
Counterparty hereunder on all such Staggered Settlement Dates and delivery times
will equal the number of Shares that Dealer would otherwise be required to
deliver on such Nominal Settlement Date.
     (h) 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.
     (i) No Netting and Set-off. The provisions of Section 2(c) of the Agreement
shall not apply to the Transaction. Each party waives any and all rights it may
have to set-off delivery or payment obligations it owes to the other party under
the Transaction against any delivery or payment obligations owed to it by the
other party, whether arising under the Agreement, under any other agreement
between parties hereto, by operation of law or otherwise.
     (j) Equity Rights. Dealer acknowledges and agrees that this Confirmation is
not intended to convey to it rights with respect to the Transaction that are
senior to the claims of common stockholders in the event of Counterparty’s
bankruptcy. For the avoidance of doubt, the parties agree that the preceding
sentence shall not apply at any time other than during Counterparty’s bankruptcy
to any claim arising as a result of a breach by Counterparty of any of its
obligations under this Confirmation or the Agreement. For the avoidance of
doubt, the parties acknowledge that the obligations of Counterparty under this
Confirmation are not secured by any collateral that would otherwise secure the
obligations of Counterparty herein under or pursuant to any other agreement.
     (k) Early Unwind. In the event the sale by Counterparty of the Convertible
Securities is not consummated pursuant to the Purchase Agreement for any reason
by the close of business in New York on June 10, 2008 (or such later date as
agreed upon by the parties, which in no event shall be later than June 17, 2008)
June 10, 2008 or such later date being the “Early Unwind Date”), the Transaction
shall automatically terminate (the “Early Unwind”) on the Early Unwind Date and
the Transaction and all of the respective rights and obligations of Dealer and
Counterparty hereunder shall be cancelled and terminated and Counterparty shall
pay to Dealer[, other than in cases involving a breach of the Purchase Agreement
by the initial purchasers,]1 an amount in cash equal to the aggregate amount of
reasonable costs and expenses relating to the unwinding of Dealer’s hedging
activities in respect of the Transaction (including market losses incurred in
reselling any Shares purchased by Dealer or its affiliates in connection with
such hedging activities, unless Counterparty agrees to purchase any such Shares
at the cost at which Dealer purchased such Shares) or, at the election of
Counterparty, deliver to Dealer Shares with a value equal to such amount, as
reasonably determined by the Calculation Agent, in which event the parties shall
enter into customary and commercially reasonable documentation relating to the
registered or exempt resale of such Shares. Following such termination and
cancellation and payment or delivery, 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 either party
arising out of, and to be performed in connection with, the Transaction either
prior to or after the Early Unwind Date. Dealer and Counterparty represent and
acknowledge to the other that upon an Early Unwind and following the payment
referred to above, all obligations with respect to the Transaction shall be
deemed fully and finally discharged.
     (l) Payments by Counterparty upon Early Termination. The parties hereby
agree that, notwithstanding anything to the contrary herein, in the Definitions
or in the Agreement, following the payment of the Premium and the Additional
Premium, if any, in the event that 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 the Transaction is terminated or cancelled
pursuant to Article 12 of the Equity Definitions and, as a result, Counterparty
would owe to Dealer an amount calculated under Section 6(e) of the Agreement or
Article 12 of the Equity Definitions, such amount shall be deemed to be zero.
     (m) Governing Law. THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING
IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL
 

1   To be deleted if Dealer is not an Initial Purchaser.

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BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE, OTHER THAN
TITLE 14 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
     (n) Amendment. This Confirmation and the Agreement may not be modified,
amended or supplemented, except in a written instrument signed by Counterparty
and Dealer.
     (o) Counterparts. This Confirmation may be executed in several
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
     9. Arbitration.
     (a) All parties to this Confirmation are giving up the right to sue each
other in court, including the right to a trial by jury, except as provided by
the rules of the arbitration forum in which a claim is filed.
     (b) Arbitration awards are generally final and binding; a party’s ability
to have a court reverse or modify an arbitration award is very limited.
     (c) The ability of the parties to obtain documents, witness statements and
other discovery is generally more limited in arbitration than in court
proceedings.
     (d) The arbitrators do not have to explain the reason(s) for their award.
     (e) The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry, unless
Counterparty is a member of the organization sponsoring the arbitration
facility, in which case all arbitrators may be affiliated with the securities
industry.
     (f) The rules of some arbitration forums may impose time limits for
bringing a claim in arbitration. In some cases, a claim that is ineligible for
arbitration may be brought in court.
     (g) The rules of the arbitration forum in which the claim is filed, and any
amendments thereto, shall be incorporated into this Confirmation.
     (h) Counterparty agrees that any and all controversies that may arise
between Counterparty and Dealer, including, but not limited to, those arising
out of or relating to the Agreement or the Transaction hereunder, shall be
determined by arbitration conducted before The New York Stock Exchange, Inc.
(“NYSE”) or NASD Dispute Resolution (“NASD-DR”), or, if the NYSE and NASD-DR
decline to hear the matter, before the American Arbitration Association, in
accordance with their arbitration rules then in force. The award of the
arbitrator shall be final, and judgment upon the award rendered may be entered
in any court, state or federal, having jurisdiction.
     (i) No person shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action or who is a member
of a putative class who has not opted out of the class with respect to any
claims encompassed by the putative class action until: (i) the class
certification is denied; (ii) the class is decertified; or (iii) Counterparty is
excluded from the class by the court.
     (j) Such forbearance to enforce an agreement to arbitrate shall not
constitute a waiver of any rights under this Confirmation except to the extent
stated herein.

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     Counterparty hereby agrees (a) to check this Confirmation carefully and
immediately upon receipt so that errors or discrepancies can be promptly
identified and rectified and (b) to confirm that the foregoing (in the exact
form provided by Dealer) correctly sets forth the terms of the agreement between
Dealer and Counterparty with respect to the Transaction, by manually signing
this Confirmation or this page hereof as evidence of agreement to such terms and
providing the other information requested herein and immediately returning an
executed copy to [          ], Facsimile No. [          ].

            Yours faithfully,

[INSERT DEALER NAME]
      By:           Name:           Title:        

Agreed and Accepted By:
NETAPP, INC.

         
By:
       
 
 
 
Name:    
 
  Title: