EXHIBIT 10.1

 

[Dealer Name]

[Dealer Address]

 

June [25]1[27]2, 2019

 

To:Uniti Fiber Holdings Inc.
10802 Executive Center Drive

Benton Building, Suite 300

Little Rock, Arkansas 72211

Attention:          Daniel Heard
Telephone No.:  (501) 850-0844

E-mail:                  daniel.heard@uniti.com

 

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
Name] (“Dealer”) and Uniti Fiber Holdings Inc. (“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
June 25, 2019 (the “Offering Memorandum”) relating to the Exchangeable Senior
Notes due 2024 (as originally issued by Counterparty, the “Exchangeable Notes”
and each USD 1,000 principal amount of Exchangeable Notes, an “Exchangeable
Note”) issued by Counterparty in an aggregate initial principal amount of USD
300,000,000 (as increased by [up to]3 an aggregate principal amount of USD
45,000,000 [if and to the extent that]4[pursuant to the exercise by]5 the
Initial Purchasers (as defined herein) [exercise]6[of]7 their option to purchase
additional Exchangeable Notes pursuant to the Purchase Agreement (as defined
herein)) pursuant to an Indenture to be dated June 28, 2019 (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
that are also defined herein by reference to the Indenture and (ii) sections of
the Indenture that are referred to herein, in each case, will conform to the
descriptions thereof in the Offering Memorandum. If any such definitions in the
Indenture or any such sections of the Indenture differ from the descriptions
thereof in the Offering Memorandum, the descriptions thereof in the Offering
Memorandum will govern for purposes of this Confirmation. The parties further
acknowledge that the Indenture section numbers used herein are based on the
draft of the Indenture last reviewed by Dealer as of the date of this
Confirmation, and if any such section numbers are changed in the Indenture as
executed, the parties will amend this Confirmation in good faith to preserve the
intent of the parties. Subject to the foregoing, references to the Indenture
herein are references to the Indenture as in effect on the date of its
execution, and if the Indenture is amended or supplemented following such date
(other than any amendment or supplement (x) pursuant to Section 10.01(j) of the
Indenture that, as determined by the Calculation Agent, conforms the Indenture
to the description of the Exchangeable 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

 

 

1 Include in the Base Call Option Confirmation.

2 Include in the Additional Call Option Confirmation.

3 Include in the Base Call Option Confirmation.

4 Include in the Base Call Option Confirmation.

5 Include in the Additional Call Option Confirmation.

6 Include in the Base Call Option Confirmation.

7 Include in the Additional Call Option Confirmation.

 

 

amendment or supplement will be disregarded for purposes of this Confirmation
unless the parties agree otherwise in writing.

 

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 (but without any Schedule except for (i) the election of the laws of
the State of New York as the governing law (without reference to choice of law
doctrine); (ii) the election that the “Cross Default” provisions of Section
5(a)(vi) of the Agreement shall apply to Dealer with (a) the phrase “, or
becoming capable at such time of being declared,” deleted from Section
5(a)(vi)(1) of the Agreement, (b) a “Threshold Amount” with respect to Dealer of
three percent of Dealer’s shareholders’ equity as of the Trade Date and (c) the
following language added to the end of Section 5(a)(vi): “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.”;
and (iii) the term “Specified Indebtedness” shall have the meaning specified in
Section 14 of the Agreement, except that such term shall not include obligations
in respect of deposits received in the ordinary course of Dealer’s banking
business) on the Trade Date. 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.

 

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

 

General Terms.

 

  Trade Date: June [25]8[27]9, 2019         Effective Date: The second Exchange
Business Day immediately prior to the Premium Payment Date         Option Style:
“Modified American”, as described under “Procedures for Exercise” below        
Option Type: Call         Buyer: Counterparty         Seller: Dealer        
Shares: The common stock of Uniti Group Inc. (the “Issuer”), par value USD
0.0001 per share (Exchange symbol “UNIT”).         Number of Options:
[300,000]10[45,000]11.  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: [__]%

 

 

8 Include in the Base Call Option Confirmation.

9 Include in the Additional Call Option Confirmation.

10 Include in the Base Call Option Confirmation.

11 Include in the Additional Call Option Confirmation.

 

2 

  Option Entitlement: A number equal to the product of the Applicable Percentage
and 80.4602.         Strike Price: USD 12.4285         Premium: USD [______]    
    Premium Payment Date: June 28, 2019         Exchange: The NASDAQ Global
Select Market         Related Exchange(s): All Exchanges         Excluded
Provisions: Section 14.04(h), Section 14.03 and Section 16.06 of the Indenture.

 

Procedures for Exercise.

 

  Exchange Date: Subject to Section 9(j)(iii), with respect to any exchange of
an Exchangeable Note, the date on which the Holder (as such term is defined in
the Indenture) of such Exchangeable Note satisfies all of the requirements for
exchange thereof as set forth in Section 14.02(b) of the Indenture; provided
that if Counterparty has not delivered to Dealer a related Notice of Exercise,
then in no event shall an Exchange Date be deemed to occur hereunder (and no
Option shall be exercised or deemed to be exercised hereunder) with respect to
any surrender of an Exchangeable Note for exchange in respect of which
Counterparty has elected to designate a financial institution for exchange in
lieu of an exchange of such Exchangeable Note for cash, Shares or a combination
thereof pursuant to Section 14.02(j) of the Indenture.         Free
Exchangeability Date: March 15, 2024         Expiration Time: The Valuation Time
        Expiration Date: June 15, 2024, subject to earlier exercise.        
Multiple Exercise: Applicable, as described under “Automatic Exercise” below.  
      Automatic Exercise: Notwithstanding Section 3.4 of the Equity Definitions,
on each Exchange Date in respect of which a Notice of Exchange (as defined in
the Indenture) that is effective as to Counterparty has been delivered by the
relevant exchanging Holder, a number of Options equal to [(i)] the number of
Exchangeable Notes in denominations of USD 1,000 as to which such Exchange Date
has occurred [minus (ii) the number of Options that are or are deemed to be
automatically exercised on such Exchange Date under the Base Call Option
Transaction Confirmation letter agreement dated June 25, 2019 between Dealer and
Counterparty (the “Base Call Option Confirmation”)]12 shall be deemed to be
automatically exercised;

 

 

12 Include for Additional Call Option Confirmation only.

 

3 

 

    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.         Notice Deadline: In respect of any
exercise of Options on any Exchange Date, 5:00 p.m. (New York City time) on the
Scheduled Valid Day immediately preceding the scheduled first day of the
Settlement Averaging Period for such Options; provided that, in respect of any
Options relating to Exchangeable Notes with an Exchange Date occurring on or
after the Free Exchangeability Date, the Notice Deadline shall be 5:00 p.m. (New
York City time) on the Scheduled Valid Day immediately preceding the Expiration
Date; provided further that, notwithstanding the foregoing, any Notice of
Exercise and the related automatic exercise of the related 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 Valid Day following the relevant
Notice Deadline and, in respect of any Options relating to Exchangeable Notes
with an Exchange Date occurring prior to the Free Exchangeability Date in
respect of which such notice is delivered after the relevant Notice Deadline
pursuant to this proviso, the Calculation Agent shall have the right to adjust
the number of Shares and/or the amount of cash deliverable by Dealer with
respect to such Options in a commercially reasonable manner as appropriate to
reflect the additional costs (including, but not limited to, hedging mismatches
and market losses) and expenses incurred by Dealer in connection with its
hedging activities (including the unwinding of any hedge position) as a result
of Dealer not having received such notice on or prior to the relevant Notice
Deadline.         Notice of Exercise: Notwithstanding anything to the contrary
in the Equity Definitions or under “Automatic Exercise” above, in order to
exercise any Options, Counterparty must notify Dealer in writing before the
applicable Notice Deadline of (i) the aggregate principal amount of Exchangeable
Notes as to which an Exchange Date has occurred in respect of such Notice
Deadline (including, if applicable, whether all or any portion of such
Exchangeable Notes are Exchangeable Notes as to which additional Shares would be
added to the Exchange Rate (as defined in the Indenture) pursuant to Section
14.03 of the Indenture or pursuant to Section 16.06 of the Indenture), (ii) the
scheduled first day of the Settlement Averaging Period and the scheduled
Settlement Date, (iii) the Relevant Settlement Method for such Options, and (iv)
if the settlement method for the related Exchangeable Notes is not Settlement in
Shares or Settlement in Cash (each as defined below), the fixed amount of cash
per Exchangeable Note that Counterparty has elected to deliver to Holders of the
related Exchangeable Notes (the “Specified Cash Amount”); provided that in
respect of any Options relating to

 

4 

    Exchangeable Notes with an Exchange Date occurring on or after the Free
Exchangeability Date, (A) such notice need only specify the information required
in clause (i) above, and (B) if the Relevant Settlement Method for such Options
is (x) Net Share Settlement and the Specified Cash Amount is not USD 1,000, (y)
Cash Settlement or (z) Combination Settlement, Dealer shall have received a
separate notice (the “Notice of Final Settlement Method”) in respect of all such
Exchangeable Notes before 5:00 p.m. (New York City time) on the Scheduled Valid
Day immediately succeeding the Free Exchangeability Date specifying the
information required in clauses (iii) and (iv) above[; provided further that any
“Notice of Exercise” or “Notice of Final Settlement Method” delivered to Dealer
pursuant to the Base Call Option Confirmation shall be deemed to be a Notice of
Exercise or Notice of Final Settlement Method, as the case may be, pursuant to
this Confirmation, and the terms of such Notice of Exercise or Notice of Final
Settlement Method shall apply, mutatis mutandis, to this
Confirmation]13.  Counterparty acknowledges its responsibilities under
applicable securities laws, and in particular Section 9 and Section 10(b) of the
Exchange Act (as defined below) and the rules and regulations thereunder, in
respect of any election of a settlement method with respect to the Exchangeable
Notes.         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
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 Scheduled Valid Day for the Shares 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

 

 

13 Include in the Additional Call Option Confirmation.

 

5 

    of the Relevant Settlement Method in the Notice of Exercise or Notice of
Final Settlement Method, as applicable, for such Option.         Relevant
Settlement Method: In respect of any Option:

 

(i)       if Counterparty has elected to settle its exchange obligations in
respect of the related Exchangeable Note (A) entirely in Shares pursuant to
Section 14.02(a)(iii)(A) of the Indenture (together with cash in lieu of
fractional Shares) (such settlement method, “Settlement in Shares”), (B) in a
combination of cash and Shares pursuant to Section 14.02(a)(iii)(C) of the
Indenture with a Specified Cash Amount less than USD 1,000 (such settlement
method, “Low Cash Combination Settlement”) or (C) in a combination of cash and
Shares pursuant to Section 14.02(a)(iii)(C) of the Indenture with a Specified
Cash Amount equal to USD 1,000, then, in each case, the Relevant Settlement
Method for such Option shall be Net Share Settlement;

 

(ii)       if Counterparty has elected to settle its exchange obligations in
respect of the related Exchangeable Note in a combination of cash and Shares
pursuant to Section 14.02(a)(iii)(C) of the Indenture with a Specified Cash
Amount greater than USD 1,000, then the Relevant Settlement Method for such
Option shall be Combination Settlement; and

 

(iii)       if Counterparty has elected to settle its exchange obligations in
respect of the related Exchangeable Note entirely in cash pursuant to Section
14.02(a)(iii)(B) of the Indenture (such settlement method, “Settlement in
Cash”), then the Relevant Settlement Method for such Option shall be Cash
Settlement.

 

  Net Share Settlement: If Net Share Settlement is applicable to any Option
exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on
the relevant Settlement Date for each such Option, a number of Shares (the “Net
Share Settlement Amount”) equal to the sum, for each Valid Day during the
Settlement Averaging Period for each such Option, of (i) (a) the Daily Option
Value for such Valid Day, divided by (b) the Relevant Price on such Valid Day,
divided by (ii) the number of Valid Days in the Settlement Averaging Period;
provided that in no event shall the Net Share Settlement Amount for any Option
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

 

6 

    or deliver, as the case may be, to Counterparty, on the relevant Settlement
Date for each such Option:

 

(i)cash (the “Combination Settlement Cash Amount”) equal to the sum, for each
Valid Day during the Settlement Averaging Period for such Option, of (A) an
amount (the “Daily Combination Settlement Cash Amount”) equal to the lesser of
(1) the product of (x) the Applicable Percentage and (y) the Specified Cash
Amount minus USD 1,000 and (2) the Daily Option Value, divided by (B) the number
of Valid Days in the Settlement Averaging Period; provided that if the
calculation in clause (A) above results in zero or a negative number for any
Valid Day, the Daily Combination Settlement Cash Amount for such Valid Day shall
be deemed to be zero; and

 

(ii)Shares (the “Combination Settlement Share Amount”) equal to the sum, for
each Valid Day during the Settlement Averaging Period for such Option, of a
number of Shares for such Valid Day (the “Daily Combination Settlement Share
Amount”) equal to (A) (1) the Daily Option Value on such Valid Day minus the
Daily Combination Settlement Cash Amount for such Valid Day, divided by (2) the
Relevant Price on such Valid Day, divided by (B) the number of Valid Days in the
Settlement Averaging Period; provided that if the calculation in sub-clause
(A)(1) above results in zero or a negative number for any Valid Day, the Daily
Combination Settlement Share Amount for such Valid Day shall be deemed to be
zero;

 

provided that in no event shall the sum of (x) the Combination Settlement Cash
Amount for any Option 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) the

 

7 

    Relevant Price on such Valid Day less 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.

 

  Make-Whole Adjustment: Notwithstanding anything to the contrary herein, in
respect of any exercise of Options relating to an exchange of Exchangeable Notes
in connection with a “Make-Whole Fundamental Change” (as defined in the
Indenture) for which additional Shares will be added to the “Exchange Rate” (as
defined in the Indenture) as determined pursuant to Section 14.03 of the
Indenture, the Daily Option Value shall be calculated as if the Option
Entitlement included the Applicable Percentage of the number of such additional
Shares as determined with reference to the adjustment set forth in such Section
14.03 of the Indenture; provided that if the sum of (i) the product of (a) the
number of Shares (if any) deliverable by Dealer to Counterparty per exercised
Option and (b) the Applicable Limit Price on the Settlement Date and (ii) the
amount of cash (if any) payable by Dealer to Counterparty per exercised Option
would otherwise exceed the amount per Option, as determined by the Calculation
Agent, that would be payable by Dealer under Section 6 of the Agreement if (x)
the relevant  Exchange Date were an Early Termination Date resulting from an
Additional Termination Event with respect to which the Transaction was the sole
Affected Transaction and Counterparty was the sole Affected Party and (y)
Section 14.03 of the Indenture were deleted, then each Daily Option Value shall
be proportionately reduced to the extent necessary to eliminate such excess.

 

  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 Exchangeable Note upon exchange
of such Exchangeable Note and (B) the number of Shares, if any, delivered to the
Holder of the related Exchangeable Note upon exchange of such Exchangeable Note
multiplied by the Applicable Limit Price on the Settlement Date for such Option,
over (ii) USD 1,000.  

 

  Applicable Limit Price: On any day, the opening price as displayed under the
heading “Op” on Bloomberg page UNIT <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.

 

8 

  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 UNIT <equity>
AQR (or any successor thereto) 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 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 and regardless of the Settlement
Method applicable to such Option:

 

(i)if the related Exchange Date occurs prior to the Free Exchangeability Date,
the 40 consecutive Valid Days commencing on, and including, the third Valid Day
following such Exchange Date; or

 

(ii)if the related Exchange Date occurs on or following the Free Exchangeability
Date, 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.

 

  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 an affiliate of the issuer of the Shares under applicable securities
laws, (ii) Dealer may deliver any

 

9 

    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 (such Rule, “Rule 144” and such Act, 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, 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 “Exchange Rate” or any “Last
Reported Sale Price” or “Daily VWAP” (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 Exchangeable Notes (upon exchange or otherwise) or (y) any
other transaction in which Holders of the Exchangeable 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 third paragraph of Section 14.04(c) of the Indenture
or the fourth paragraph 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, upon any Potential
Adjustment Event, the Calculation Agent shall make a corresponding adjustment 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 to the extent an analogous adjustment is required to be made
pursuant to the Indenture in connection with such Potential Adjustment Event.

 

Notwithstanding the foregoing and “Consequences of Merger Events” below:

 

(i)if the Calculation Agent in good faith disagrees with any adjustment to the
Exchangeable Notes that involves an exercise of discretion by Counterparty, its
board of directors or a committee thereof (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 the adjustment to be made to any one

 

10 

  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 Exchangeable Note under the
Indenture because the relevant Holder was deemed to be a record owner of the
underlying Shares on the related Exchange Date, then the Calculation Agent shall
make an adjustment 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 (including, but not limited to,
hedging mismatches and market losses) and expenses incurred by Dealer in
connection with its hedging activities as a result of such event or condition
not having been publicly announced prior to the beginning of such period; and

 

(iii)if any Potential Adjustment Event is declared and (a) the event or
condition giving rise to such Potential Adjustment Event is subsequently
amended, modified, cancelled or abandoned, (b) the “Exchange 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 “Exchange 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 (including, but not limited to, hedging
mismatches and market losses) and expenses incurred by Dealer in connection with
its hedging activities as a result of such Potential Adjustment Event Change.

 

11 

  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, which section shall not apply with respect to the
Transaction, a “Merger Event” means the occurrence of any event or condition set
forth in the definition of “Specified Corporate Event” in Section 14.07(a) of
the Indenture.

 

  Tender Offers: Not Applicable.

 

  Consequences of Merger Events: Notwithstanding Section 12.2 of the Equity
Definitions, upon the occurrence of a Merger Event, 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, Strike Price, Number of Options,
Option Entitlement and any other variable relevant to the exercise, settlement
or payment for the Transaction to the extent an analogous adjustment is required
to be made pursuant to the Indenture in connection with such Merger Event,
subject to the second paragraph under “Method of Adjustment”; provided, however,
that such adjustment shall be made without regard to any adjustment to the
Exchange Rate pursuant to any Excluded Provision, provided further that if, with
respect to a Merger Event, (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 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 commercially reasonable election.

 

If, in respect of any Merger Event to which the immediately preceding paragraph
applies, the adjustments to be made in accordance with such paragraph would
result in Issuer not being the issuer of the Shares, then with respect to such
Merger Event, as a condition precedent to the adjustments contemplated in the
immediately preceding paragraph, Dealer, the Issuer of the Affected Shares and
the entity that will be the Issuer of the New Shares shall, prior to
consummation of such Merger Event, have entered into such documentation
containing agreements relating to “tacking” and “holding period” related
considerations under U.S. securities law and credit exposure assumed by Dealer
as the result of such Merger Event, as reasonably requested by Dealer that
Dealer has determined, in its good faith, reasonable judgment, to be reasonably
necessary or appropriate to allow Dealer to continue as a party to the
Transaction, as adjusted under the immediately preceding paragraph, and to
preserve its hedging or hedge unwind

 

12 

activities in connection with the Transaction in a manner compliant with legal,
regulatory and self-regulatory requirements and related policies and procedures
applicable to Dealer, consistently applied across transactions similar to the
Transaction and for counterparties similar to Counterparty, and if such
conditions are not met or if the Calculation Agent determines that no adjustment
under the immediately preceding paragraph will produce a commercially reasonable
result, then the consequences set forth in Section 12.2(e)(ii) of the Equity
Definitions shall apply to such Merger Event (as if Merger Event were as defined
in Section 12.1(b) of the Equity Definitions).

 

  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.

 

  Restrictions on Adjustments: Notwithstanding anything to the contrary in the
Equity Definitions or this Confirmation, none of the events listed in Section
14.04(i) of the Indenture will constitute a Potential Adjustment Event or Merger
Event, and no adjustment will be made to the Transaction in connection with any
such event pursuant to the Equity Definitions (as amended by this Confirmation)
or otherwise.

 

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” and (iii)
replacing the parenthetical beginning after the word “regulation” in the second
line thereof with 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)”. Notwithstanding
anything to the contrary in the Equity Definitions, a Change in Law described in
clause (Y) of Section 12.9(a)(ii) of the Equity Definitions shall not constitute
a Change in Law and instead shall constitute an Increased Cost of Hedging as
described in Section 12.9(a)(vi) of the Equity Definitions, and any such

 

13 

    determination of a Change in Law shall be consistently applied by the
Determining Party across transactions similar to the Transaction and for
counterparties similar to Counterparty.

 

  Failure to Deliver: Applicable

 

  Hedging Disruption: Applicable; provided that:

 

(i)Section 12.9(a)(v) of the Equity Definitions is hereby amended by
(a) inserting the following words at the end of clause (A) thereof: “in the
manner contemplated by the Hedging Party on the Trade Date” and (b) inserting
the following two phrases at the end of such Section:

 

“For the avoidance of doubt, the term “equity price risk” shall be deemed to
include, but shall not be limited to, stock price and volatility risk. And, for
the further avoidance of doubt, any such transactions or assets referred to in
phrases (A) or (B) above must be available on commercially reasonable pricing
terms.”; and

 

(ii)Section 12.9(b)(iii) of the Equity Definitions is hereby amended by
inserting in the third line thereof, after the words “to terminate the
Transaction”, the words “or a portion of the Transaction affected by such
Hedging Disruption”.

 

  Increased Cost of Hedging: Applicable solely with respect to a “Change in Law”
described in clause (Y) of Section 12.9(a)(ii) of the Equity Definitions as set
forth in the last sentence opposite the caption “Change in Law” above (which
determination shall be consistently applied by the Determining Party across
transactions similar to the Transaction and for counterparties similar to
Counterparty).

 

  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.

 

  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 the Determining Party were the Calculation Agent.

 

Non-Reliance:Applicable

 

14 

  Agreements and Acknowledgments
Regarding Hedging Activities: Applicable

 

  Additional Acknowledgments: Applicable

 

4.                   Calculation Agent. Dealer. Whenever the Calculation Agent
is required to act or to exercise judgment in any way with respect to the
Transaction, it will do so in good faith and in a commercially reasonable
manner. Following the occurrence and during the continuation of an Event of
Default pursuant to Section 5(a)(vii) of the Agreement with respect to which
Dealer is the Defaulting Party, Counterparty shall have the right to designate
an independent, nationally recognized equity derivatives dealer to replace
Dealer as Calculation Agent, and the parties shall work in good faith to execute
any appropriate documentation required by such replacement Calculation Agent.
Following any determination, adjustment or calculation by the Calculation Agent,
the Hedging Party or the Determining 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”), the Calculation Agent, the Hedging Party or the
Determining Party, as the case may be, will within five Exchange Business Days
of a request by Counterparty, provide to Counterparty a report (in a commonly
used file format for the storage and manipulation of financial data without
disclosing any proprietary or confidential models or other information that is
subject to contractual, legal or regulatory obligations to not disclose such
information) displaying in reasonable detail the basis for such determination,
adjustment or calculation, as the case may be.

 

5.                   Account Details.

 

(a)Account for payments to Counterparty:

 

To be advised.

 

Account for delivery of Shares to Counterparty:

 

To be advised.

 

(b)Account for payments to Dealer:

 

[______________]

 

Account for delivery of Shares from Dealer:

 

DTC [____]

 

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: [_______]

 

7.                   Notices.

 

(a)Address for notices or communications to Counterparty:

 

Uniti Fiber Holdings Inc.

10802 Executive Center Drive

Benton Building, Suite 300

Little Rock, Arkansas 72211

Attention:           Daniel Heard

Telephone No.:  (501) 850-0844

E-mail:                  daniel.heard@uniti.com

 

(b)Address for notices or communications to Dealer:

 

15 

[_________________________]

 

8.                   Representations and Warranties of Counterparty.

 

In addition to the representations and warranties set forth in Section 3(a) of
the Agreement, Counterparty hereby represents and warrants to Dealer on the date
hereof and on and as of the Premium Payment Date that:

 

(a)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.

 

(b)Counterparty is an “eligible contract participant” (as such term is defined
in Section 1a(18) of the Commodity Exchange Act, as amended, other than a person
that is an eligible contract participant under Section 1a(18)(C) of the
Commodity Exchange Act).

 

(c)Counterparty is not, on the date hereof, in possession of any material
non-public information with respect to Counterparty, the Issuer or the Shares.

 

(d)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.

 

9.                   Other Provisions.

 

(a)Opinions. Counterparty shall deliver to Dealer one or more opinions of
counsel, dated as of the Premium Payment Date, with respect to the matters set
forth in Section 3(a) of the Agreement; provided that any such opinion of
counsel may contain customary exceptions and qualifications. Delivery of such
opinion or opinions, as the case may be, when due, to Dealer shall be a
condition precedent for the purpose of Section 2(a)(iii) of the Agreement with
respect to each obligation of Dealer under Section 2(a)(i) of the Agreement.

 

(b)Repurchase Notices. If on any day Issuer effects any repurchase of Shares,
Counterparty shall give Dealer a written notice of such repurchase (a
“Repurchase Notice”) within one Exchange Business Day if, following such
repurchase, the number of outstanding Shares, as the case may be, as determined
on such day is (i) less than 165.8 million (in the case of the first such
notice) or (ii) thereafter more than 15.0 million less than the number of
Shares, as the case may be, included in the immediately preceding Repurchase
Notice. Counterparty agrees to indemnify and hold harmless Dealer and its
affiliates and their respective officers, directors, employees, affiliates,
advisors, agents and controlling persons (each, an “Indemnified Person”) from
and against any and all losses (including losses relating to Dealer’s hedging
activities as a consequence of becoming, or of the risk of becoming, a Section
16 “insider”, including without limitation, any forbearance from commercially
reasonable hedging activities or cessation of hedging activities and any losses
in connection therewith with respect to the Transaction), claims, damages,
judgments, liabilities and reasonable expenses (including reasonable attorney’s
fees), joint or several, which an Indemnified Person actually 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 expenses incurred 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 one counsel per relevant jurisdiction reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and
any others Counterparty may designate in such proceeding and shall pay the 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 an indemnity may be sought hereunder. In
addition, Counterparty shall

 

16 

  not be liable 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. 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 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. Issuer 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 Issuer, other than a
distribution meeting the requirements of the exception set forth in Rules
101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall cause Issuer to
not, until the second Scheduled Trading Day immediately following the Effective
Date, engage in any such distribution.

 

(d)No Manipulation. Counterparty is not entering into the Transaction to create
actual or apparent trading activity in the Shares (or any security convertible
into or exchangeable for the Shares) or to raise or depress or otherwise
manipulate the price of the Shares (or any security convertible into or
exchangeable for the Shares) or otherwise in violation of the Exchange Act.

 

(e)Transfer or Assignment.

 

(i)Counterparty shall have the right to transfer or assign its rights and
obligations hereunder with respect to all, but not less than all, of the Options
hereunder (such Options, the “Transfer Options”); provided that such transfer or
assignment shall be subject to reasonable conditions that Dealer may impose,
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 9(b) or any
obligations under Section 9(o) or 9(t) 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 requested and
reasonably satisfactory to Dealer;

 

(C)Dealer will not, as a result of such transfer and assignment, (i) receive
from the transferee or assignee on any payment or delivery date any payment or
delivery less than an amount that Dealer would have been entitled to receive
from Counterparty in the absence of such transfer or assignment or (ii) be
required to pay the transferee on any payment date an amount under Section
2(d)(i)(4) of the

 

17 

   Agreement greater than an amount that Dealer would have been required to pay
to Counterparty in the absence of such transfer and 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)The transferee or assignee shall provide Dealer with a complete and accurate
U.S. Internal Revenue Service Form W-9 or W-8 (as applicable) prior to becoming
a party to the Transaction;

 

(F)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;
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.

 

(ii)Dealer may, without Counterparty’s consent, transfer or assign all or any
part of its rights or obligations under the Transaction (A) 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]14, or (B) with Counterparty’s prior written consent
(such consent not to be unreasonably withheld) to any other third party with 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 and (2) A- by Standard and Poor’s
Rating Group, Inc. or its successor (“S&P”), or A3 by Moody’s Investor Service,
Inc. (“Moody’s”) or, if either S&P or Moody’s ceases to rate such debt, at least
an equivalent rating or better by a substitute rating agency mutually agreed by
Counterparty and Dealer; provided that any transfer or assignment effected by
Dealer shall not result in a deemed exchange from Counterparty’s perspective
within the meaning of Section 1001 of the U.S. Internal Revenue Code of 1986, as
amended (the “Code”); provided further that (x) Counterparty shall not, as a
result of such transfer or assignment, (i) receive from the transferee or
assignee on any payment or delivery date any payment or delivery less than an
amount that Counterparty would have been entitled to receive from Dealer in the
absence of such transfer or assignment or (ii) 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 Dealer in the absence of such transfer or assignment, (y) the transferee or
assignee shall provide Counterparty with a complete and accurate U.S. Internal
Revenue Service Form W-9 or W-8 (as applicable) prior to becoming a party to the
Transaction and (z) 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
results described in clauses (x) will not occur upon or after such transfer and
assignment. If at any time at which (A) the Section 16 Percentage exceeds 9.0%,
(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

 

 

14 Include if Dealer is not parent entity.

 

18 

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
9(m) shall apply to any amount that is payable by Dealer to Counterparty
pursuant to this sentence as if Counterparty was not the Affected Party). The
“Section 16 Percentage” as of any day is the fraction, expressed as a
percentage, (A) the numerator of which is the number of Shares that Dealer and
any of its affiliates or any other person subject to aggregation with Dealer for
purposes of the “beneficial ownership” test under Section 13 of the Exchange
Act, or any “group” (within the meaning of Section 13 of the Exchange Act) of
which Dealer is or may be deemed to be a part beneficially owns (within the
meaning of Section 13 of the Exchange Act), without duplication, on such day
(or, to the extent that for any reason the equivalent calculation under Section
16 of the Exchange Act and the rules and regulations thereunder results in a
higher number, such higher number) and (B) the denominator of which is the
number of Shares outstanding on such day. The “Option Equity Percentage” as of
any day is the fraction, expressed as a percentage, (A) the numerator of which
is the sum of (1) the product of the Number of Options and the Option
Entitlement and (2) the aggregate number of Shares underlying any other call
option transaction sold by Dealer to Counterparty or Issuer, 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 or Issuer 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, as the case may be, that could reasonably be expected to give
rise to reporting or registration obligations (except for any filing
requirements on Form 13F, Schedule 13D or Schedule 13G under the Exchange Act),
mandatory takeover offers or other requirements (including obtaining prior
approval from shareholders or any other person or entity) of a Dealer Person, or
could reasonably be expected (as determined by Dealer in good faith) to result
in an adverse effect on a Dealer Person, under any Applicable Restriction, as
determined by Dealer in its reasonable discretion, minus (B) 1% of the number of
Shares outstanding.

 

(iii)Notwithstanding any other provision in this Confirmation to the contrary
requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or
other securities, or make or receive any payment in cash, to or from
Counterparty, Dealer may designate any of its affiliates 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 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 hedging activities hereunder, Dealer reasonably determines that it
would not be practicable or advisable to deliver, or to acquire Shares to
deliver, any or all of the Shares to be delivered by Dealer on any Settlement
Date for the Transaction, Dealer may, by notice to Counterparty on or prior to
any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares
on two or more dates (each, a “Staggered Settlement Date”) as follows:

 

(i)in such notice, Dealer will specify to Counterparty the related Staggered
Settlement Dates (each of which will be on or prior to such Nominal Settlement
Date) and the number of Shares that it will deliver on each Staggered Settlement
Date;

 

19 

(ii)the aggregate number of Shares that Dealer will deliver to Counterparty
hereunder on all such Staggered Settlement Dates will equal the number of Shares
that Dealer would otherwise be required to deliver on such Nominal Settlement
Date; and

 

(iii)if the Net Share Settlement terms or the Combination Settlement terms set
forth above were to apply on the Nominal Settlement Date, then the Net Share
Settlement terms or the Combination Settlement terms, as the case may be, will
apply on each Staggered Settlement Date, except that the Shares otherwise
deliverable on such Nominal Settlement Date will be allocated among such
Staggered Settlement Dates as specified by Dealer in the notice referred to in
clause (i) above.

 

(g)[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.][15]

 

(h)[Role of Agent. [Insert relevant Dealer agency language, if any]]

 

(i)Dividends. If at any time during the period from and including the Effective
Date, to but excluding the Expiration Date, (i) an ex-dividend date for a
regular quarterly cash dividend occurs with respect to the Shares (an
“Ex-Dividend Date”), and that dividend is less than the Regular Dividend on a
per Share basis or (ii) if no Ex-Dividend Date for a regular quarterly cash
dividend occurs with respect to the Shares in any quarterly dividend period of
Issuer, then the Calculation Agent will make a corresponding adjustment to any
one or more of the Strike Price, Number of Options, Option Entitlement and/or
any other variable relevant to the exercise, settlement or payment for the
Transaction to preserve the fair value of the Options to Dealer after taking
into account such dividend or lack thereof. “Regular Dividend” shall mean USD
0.05 per Share per quarter. Upon any adjustment to the “Initial Dividend
Threshold” (as defined in the Indenture) for the Exchangeable Notes pursuant to
the Indenture, the Calculation Agent will make a corresponding adjustment to the
Regular Dividend for the Transaction.

 

(j)                  Additional Termination Events.

 

(i)Notwithstanding anything to the contrary in this Confirmation if an event of
default with respect to Counterparty occurs under the terms of the Exchangeable
Notes as set forth in Section 6.01 of the Indenture, and such event of default
results in the Exchangeable Notes becoming or being declared due and payable
pursuant to the terms of the Indenture, 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.

 

(ii)Within five Scheduled Trading Days promptly following any Repayment Event
(as defined below), Counterparty shall notify Dealer of such Repayment Event and
the aggregate principal amount of Exchangeable Notes subject to such Repayment
Event (any such notice, a “Repayment Notice”). The receipt by Dealer from
Counterparty of any Repayment Notice shall constitute an Additional Termination
Event as provided in this Section 9(j)(ii). 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 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 Exchangeable
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 Exchangeable Notes (and for the purposes of

 

 

15 Include if applicable for Dealer.

 

20 

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 Exchangeable Notes
specified in such Repayment Notice shall be allocated first to the Base Call
Option Confirmation until all Options thereunder are exercised or
terminated),]16 and (B) the Number of Options as of the date Dealer designates
such Early Termination Date and, as of such date, the Number of Options shall be
reduced by the number of Repayment Options. Any payment hereunder with respect
to such termination (the “Repayment Unwind Payment”) shall be calculated
pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had
been designated in respect of a Transaction having terms identical to the
Transaction and a Number of Options equal to the number of Repayment Options,
(2) Counterparty were the sole Affected Party with respect to such Additional
Termination Event and (3) the terminated portion of the Transaction were the
sole Affected Transaction. For the avoidance of doubt, solely for purposes of
calculating the amount payable pursuant to Section 6 of the Agreement pursuant
to the immediately preceding sentence, Counterparty shall assume that the
relevant Repayment Event (and, if applicable, the related Fundamental Change and
the announcement of such Fundamental Change) had not occurred. “Repayment Event”
means that (i) any Exchangeable 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
Exchangeable Notes are delivered to Counterparty or any of its subsidiaries in
exchange for delivery of any property or assets of such party (howsoever
described), (iii) any principal of any of the Exchangeable Notes is repaid prior
to the final maturity date of the Exchangeable Notes (for any reason other than
as a result of an acceleration of the Exchangeable Notes that results in an
Additional Termination Event pursuant to the preceding Section 9(j)(i)), or (iv)
any Exchangeable Notes are exchanged by or for the benefit of the Holders
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 exchange of Exchangeable
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.

 

(iii)Notwithstanding anything to the contrary in this Confirmation, the receipt
by Dealer from Counterparty, within the applicable time period set forth
opposite “Notice of Exercise” in Section 2, of any Notice of Exercise in respect
of Options that relate to Exchangeable Notes as to which additional Shares would
be added to the Exchange Rate (as defined in the Indenture) pursuant to Section
16.06 of the Indenture in connection with the delivery of a “Notice of
Redemption” (as defined in the Indenture) shall constitute an Additional
Termination Event as provided in this Section 9(j)(iii).  Upon receipt of any
such Notice of Exercise, Dealer shall designate an Exchange Business Day
following such Additional Termination Event (which Exchange Business Day shall
be on, or as promptly as practical after, the related settlement date for
exchange of such Exchangeable Notes) as an Early Termination Date with respect
to the portion of the Transaction corresponding to a number of Options (the
“Make-Whole Exchange Options”) equal to the lesser of (A) the number of such
Options specified in such Notice of Exercise [minus the number of “Make-Whole
Exchange Options” (as defined in the Base Call Option Confirmation), if any,
that relate to such Exchangeable Notes]17 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 Make-Whole Exchange
Options.  Any payment hereunder with respect to such termination (the
“Make-Whole 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 Make-Whole Exchange Options, (2)

 

 

16 Include in the Additional Call Option Confirmation.

17 Insert in Additional Call Option Confirmation only.

 

21 

Counterparty were the sole Affected Party with respect to such Additional
Termination Event, (3) the terminated portion of the Transaction were the sole
Affected Transaction and (4) Section 16.06 of the Indenture were deleted;
provided that the amount of cash payable in respect of such early termination by
Dealer to Counterparty shall not be greater than the product of (x) the
Applicable Percentage and (y) the excess of (I) (1) the number of Make-Whole
Exchange Options, multiplied by (2) the Exchange Rate (as defined in the
Indenture, and after taking into account any applicable adjustments to the
Exchange Rate pursuant to Section 16.06 of the Indenture), multiplied by (3) the
Applicable Limit Price on the date on which payment is made pursuant to this
Section 9(j)(iii) over (II) the aggregate principal amount of such Exchangeable
Notes.

 

(k)Amendments to Equity Definitions.

 

(i)Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1)
replacing “such an event” in the second line thereof with “(x) an Insolvency
Filing Dealer may elect or (y) a Change in Law”, (2) inserting the words “(as
applicable)” immediately following the words “notice to the other party” in the
fourth line thereof and (3) inserting immediately prior to the period at the end
thereof with the words “; provided that Counterparty may only elect to terminate
the Transaction upon the occurrence of a Change in Law if concurrently with
electing to terminate the Transaction Counterparty represents and warrants to
Dealer that it is not in possession of any material non-public information with
respect to Counterparty or the Shares”.

 

(ii)Section 12.9(b)(vi) of the Equity Definitions is hereby amended by adding
the phrase “, provided that in connection with any election by the Non-Hedging
Party to terminate the Transaction, it acknowledges to Dealer, as of the date of
such election, 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” at the end of subsection (C).

 

(l)No Collateral or Setoff. Notwithstanding any provision of the Agreement or
any other agreement between the parties to the contrary, no obligations of
either party hereunder are secured by any collateral. Each party waives any and
all rights it may have to set off obligations arising under the Agreement and
the Transaction against other obligations between the parties, whether arising
under any other agreement, applicable law or otherwise.

 

(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) a Merger Event 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 Merger 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 acknowledges to Dealer, as of
the date of such election, 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 connection with such election, in which
case the provisions of Section 12.7 or Section 12.9 of the Equity Definitions,
or the provisions of Section 6(d)(ii) of the Agreement, as the case may be,
shall apply.

 

22 

  Share Termination Alternative: If applicable, Dealer shall deliver to
Counterparty the Share Termination Delivery Property on, or within a
commercially reasonable period of time after, the date when the relevant Payment
Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity
Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable, in
satisfaction of such Payment Obligation in the manner reasonably requested by
Counterparty free of payment.

 

  Share Termination Delivery Property: A number of Share Termination Delivery
Units, as calculated by the Calculation Agent, equal to the Payment Obligation,
divided by the Share Termination Unit Price.  The Calculation Agent shall adjust
the Share Termination Delivery Property by replacing any fractional portion of a
security therein with an amount of cash equal to the value of such fractional
security based on the values used to calculate the Share Termination Unit Price.

 

  Share Termination Unit Price: The value to Dealer of property contained in one
Share Termination Delivery Unit, as determined by the Calculation Agent in its
good faith discretion by commercially reasonable means and notified by the
Calculation Agent to Dealer at the time of notification of the Payment
Obligation. For the avoidance of doubt, the parties agree that in determining
the Share Termination Delivery Unit Price the Calculation Agent may consider the
purchase price paid in connection with the purchase of Share Termination
Delivery Property.

 

  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 consisting
of the number or amount of each type of property received by holders of all or
substantially all Shares (determined on a per Share basis and 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, as applicable. 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 (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”

 

23 

    shall be read as references to “Share Termination Delivery Units”. “Share
Termination Settled” in relation to the Transaction means that Share Termination
Alternative is applicable to the Transaction.

 

(n)Waiver of Jury Trial. Each party waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any suit,
action or proceeding relating to the Transaction. Each party (i) certifies that
no representative, agent or attorney of either party has represented, expressly
or otherwise, that such other party would not, in the event of such a suit,
action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other party have been induced to enter into the Transaction, as
applicable, by, among other things, the mutual waivers and certifications
provided herein.

 

(o)Registration. Counterparty hereby agrees that if, in the good faith
reasonable judgment of Dealer based on advice of counsel, the Shares (“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 (other than as a result of Dealer being or
having been in the three months preceding an “affiliate” (as defined under Rule
144) of the Issuer), 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 to cover
the resale of such Hedge Shares and enter into an agreement, in form and
substance satisfactory to Dealer, substantially in the form of an underwriting
agreement for a registered secondary offering; 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 similar size and type, in form and substance
satisfactory 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 of similar size and type), or (iii) purchase the Hedge Shares from
Dealer at the Relevant Price on such Exchange Business Days, and in the amounts,
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, other than in the
event Dealer determines in good faith that such postponement or addition
resulted solely pursuant to the circumstances set forth in clause (ii)(y) below,
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, based on the
advice of counsel in the case of the immediately following clause (ii), that
such action is reasonably necessary or appropriate (i) to preserve Dealer’s
commercially reasonable hedging or hedge unwind activity hereunder in light of
existing liquidity conditions or (ii) to enable Dealer to effect purchases of
Shares in connection with its commercially reasonable hedging, hedge unwind or
settlement activity hereunder in a manner that would, if Dealer were
Counterparty or an affiliated purchaser of Counterparty, be in compliance (x)
with applicable legal, regulatory or self-regulatory requirements, or (y) with
related policies and procedures applicable to Dealer, consistently applied
across transactions similar to the Transaction and for counterparties similar to
Counterparty; provided that no such Valid Day or other date of valuation,
payment or delivery may be postponed or added more than 40 Valid Days after the
original Valid Day or other date of valuation, payment or delivery, as the case
may be.

 

24 

(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
any event at least one Exchange Business Day prior to the relevant Adjustment
Notice Deadline) 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 Exchangeable Notes in connection with any Potential Adjustment Event
(other than a Potential Adjustment in respect of the Dilution Adjustment
Provision set forth in Section 14.04(b) or Section 14.04(d) or Merger Event and
(B) promptly following any such adjustment, Counterparty shall give Dealer
written notice of the details of such adjustment. The “Adjustment Notice
Deadline” means (i) for any Potential Adjustment in respect of the Dilution
Adjustment Provision set forth in Section 14.04(a) of the Indenture, the
relevant Ex-Dividend Date (as such term is defined in the Indenture) or
Effective Date (as such term is defined in the Indenture), as the case may be,
(ii) for any Potential Adjustment in respect of the Dilution Adjustment
Provision in the first formula set forth in Section 14.04(c) of the Indenture,
the first Trading Day (as such term is defined in the Indenture) of the period
referred to in the definition of “SP0” in such formula, (iii) for any Potential
Adjustment in respect of the Dilution Adjustment Provision in the second formula
set forth in Section 14.04(c) of the Indenture, the first Trading Day (as such
term is defined in the Indenture) of the Valuation Period (as such term is
defined in the Indenture), (iv) for any Potential Adjustment in respect of the
Dilution Adjustment Provision set forth in Section 14.04(e) of the Indenture,
the first Trading Day (as such term is defined in the Indenture) of the period
referred to in the definition of “SP1” in the formula in such Section, and (v)
for any Merger Event, the effective date of such Merger Event (or, if earlier,
the first day of any valuation or similar period in respect of such Merger
Event).

 

(u)[Reserved].

 

(v)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

 

25 

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)).

 

(w)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 Issuer 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.

 

(x)Early Unwind. In the event the sale of the [“Firm Securities”]18 [“Optional
Securities”]19 (as defined in the Purchase Agreement (the “Purchase Agreement”),
dated June 25, 2019, among Counterparty, Issuer and the guarantors party thereto
and Barclays Capital Inc., as the representative of the initial purchasers named
therein (the “Initial Purchasers”)) is not consummated with the Initial
Purchasers for any reason, or Counterparty fails to deliver to Dealer any
opinion of counsel required pursuant to Section 9(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 or Premium Payment
Date, as the case may be. 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.

 

(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.

 

(z)[Insert any relevant QFC / resolution stay / BRRD provision]

 

(aa)Tax Matters.

 

(i)Withholding Tax imposed on payments to certain non-US counterparties. “Tax,”
as used in Section 9(aa)(iii) of this Confirmation (Payor Tax Representations),
and “Indemnifiable Tax,” as defined in Section 14 of the Agreement, shall not
include (A) any U.S. federal withholding tax imposed or collected pursuant to
Sections 1471 through 1474 of the Code, any current or future regulations or
official interpretations thereof, any agreement entered

 

 

18 Insert for Base Call Option Confirmation.

19 Insert for Additional Call Option Confirmation.

 

26 

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 (a “FATCA Withholding Tax”) or (B) any tax imposed or collected
pursuant to Section 871(m) of the Code or any current or future regulations or
official interpretation thereof (a “Section 871(m) Withholding Tax”).
Notwithstanding anything to the contrary herein, “Tax” as used in Section
9(aa)(iii) of this Confirmation (Payor Tax Representations) and “Indemnifiable
Tax,” as defined in Section 14 of the Agreement, shall include any tax imposed
or collected pursuant to Sections 897 or 1445 of the Code or any current or
future regulations or interpretations thereof (a “FIRPTA Withholding Tax”). For
the avoidance of doubt each of a FATCA Withholding Tax, a Section 871(m)
Withholding Tax and a FIRPTA 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.

 

(ii)Tax Documentation. [For the purpose of Sections 4(a)(i) and 4(a)(ii) of the
Agreement, Counterparty shall provide to Dealer a valid U.S. Internal Revenue
Service Form W-9, or any successor thereto, and Dealer shall provide to
Counterparty a valid U.S. Internal Revenue Service Form W-8ECI, or any successor
thereto, (i) on or before the date of execution of this Confirmation and (ii)
promptly upon learning that any such tax form previously provided by it has
become obsolete or incorrect. Additionally, each party shall, promptly upon
request by the other party, provide such other tax forms and documents
reasonably requested by the other party.]20

 

(iii)Payor Tax Representations. For the purpose of Section 3(e) of the
Agreement, each party makes the following representation:

 

It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 9(h) of the Agreement) to be made by it to
the other party under the Agreement. In making this representation, it may rely
on (i) the accuracy of any representations made by the other party pursuant to
Section 9(aa)(iv) of this Confirmation, (ii) the satisfaction of the agreement
contained in Section 4(a)(i) or 4(a)(iii) of the Agreement and the accuracy and
effectiveness of any document provided by the other party pursuant to Section
4(a)(i) or 4(a)(iii) of the Agreement and (iii) the satisfaction of the
agreement of the other party contained in the last sentence of Section 9(aa)(iv)
of this Confirmation, except that it will not be a breach of this representation
where reliance is placed on clause (ii) above and the other party does not
deliver a form or document under Section 4(a)(iii) by reason of material
prejudice to its legal or commercial position.

 

(iv)Payee Tax Representations. For the purpose of Section 3(f) of the Agreement,
Counterparty makes the following representations to Dealer:

 

Counterparty is (i)(x) a “U.S. person” (as that term is used in section
1.1441-4(a)(3)(ii) of United States Treasury Regulations) for U.S. federal
income tax purposes and (y) an exempt recipient under United States Treasury
Regulation Section 1.6049-4(c)(1)(ii) or (ii) disregarded as an entity separate
from a person described in the preceding clause (i).

 

For the purpose of Section 3(f) of the Agreement, Dealer makes the following
representation to Counterparty:

 

[(A) Dealer is a “foreign person” (as that term is used in Section
1.6041-4(a)(4) of the United States Treasury Regulations) for U.S. federal
income tax purposes and

 

 

20 To be updated as necessary to reflect appropriate tax forms for Dealer.

 

27 

(B) Each payment received or to be received by it in connection with this
Confirmation will be effectively connected with its conduct of a trade or
business in the United States.]21

 

Each party agrees to give notice of any failure of a representation made by it
under this Section 9(aa)(iv) to be accurate and true promptly upon learning of
such failure.

 

(bb)REIT Matters. The parties agree that for all purposes of the Agreement and
this Confirmation, the terms “Beneficial Ownership” and “Constructive Ownership”
in Article Seven of Issuer’s corporate charter, as in effect under the General
Corporation Law of the State of Maryland on the date hereof (the “Charter”)
shall not include shares held by Dealer or its affiliates to the extent such
shares are held in a purely fiduciary capacity and such shares shall not be
considered Beneficially Owned or Constructively Owned by Dealer or its
affiliates under the Charter.

 

(cc)[Insert any other relevant Dealer boilerplate.]

 

 

21 To be updated as necessary to reflect appropriate tax representations for
Dealer.

 

28 

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to Dealer.

 

 

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

 

Accepted and confirmed
as of the Trade Date:

 

Uniti Fiber Holdings Inc.           By:     Authorized Signatory   Name: