Exhibit 10.3

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Execution Copy

 

Warrant Transaction

 

Date:

 

April 17, 2007

 

 

 

To:

 

Lawson Software, Inc.

 

 

Attention:

Treasurer

 

 

380 Saint Peter Street

 

 

St. Paul, MN 55102

 

 

Facsimile:

651-767-4868

 

 

Telephone:

651-767-4920

 

 

Email:

treasury@lawson.com

 

 

 

 

 

 

With a copy to:

General Counsel

 

 

380 Saint Peter Street

 

 

St. Paul, MN 55102

 

 

Facsimile:

651-767-4827

 

 

Telephone:

651-767-4940

 

 

Email:

legal.americas@lawson.com

 

 

 

 

From:

 

Lehman Brothers Inc., acting as Agent

 

 

Lehman Brothers OTC Derivatives Inc., acting as Principal

 

 

Andrew Yare - Transaction Management Group

 

 

Facsimile:

646-885-9546 (United States of America)

 

 

Telephone:

212-526-9986

 

 

 

 

Ref. Numbers:

 

Global Deal ID: 3003799

 

Dear Sir or Madam:

The purpose of this communication (this “Confirmation”) is to confirm the terms
and conditions of the transaction (the “Transaction”) entered into between
Lehman Brothers OTC Derivatives Inc. (“Party A”) and Lawson Software, Inc.
(“Party B”) on the Trade Date specified below.  This Confirmation constitutes a
“Confirmation” as referred to in the Agreement specified below. This
Confirmation is sent on behalf of both Party A and Lehman Brothers Inc.
(“LBI”).  Lehman Brothers OTC Derivatives Inc. is not a member of the Securities
Investor Protection Corporation.

This Confirmation evidences a complete and binding agreement between Party A and
Party B as to the terms of the Transaction to which this Confirmation relates. 
This Confirmation supplements, forms part of, and is subject to an agreement in
the form of the 1992 ISDA Master Agreement (Multicurrency—Cross Border) (the
“Agreement”) as if we had executed an agreement in such form (but without any
Schedule except for the elections set forth herein) on the Trade Date of the
Transaction.  In the event of any inconsistency between the provisions of the
Agreement and this Confirmation, this Confirmation will prevail for the purpose
of the Transaction.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”) and the 2000 ISDA Definitions (the “Swap
Definitions”, and, together with the Equity Definitions, the “Definitions”), in
each case as published by the International Swaps and Derivatives Association,
Inc., are incorporated into this Confirmation.  References herein to
“Transaction” shall be deemed references to “Swap Transaction” for purposes of
the Swap Definitions.  In the event of any inconsistency between the Equity
Definitions and the Swap Definitions, the Equity Definitions will govern.  In
the event of any inconsistency between either set of Definitions and this
Confirmation, this Confirmation will govern.  For purposes of the Equity

Lehman Brothers

745 SEVENTH AVENUE,

NEW YORK NY 10019

1

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Definitions, each reference herein to a Warrant shall be deemed to be a
reference to a Call Option or an Option, as the context requires.

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

General Terms:

Agent:

 

LBI is acting as agent on behalf of Party A and Party B for the Transaction. 
LBI has no obligations, by guarantee, endorsement or otherwise, with respect to
the performance of the Transaction by either party.

 

 

 

Trade Date:

 

April 17, 2007

 

 

 

Components:

 

The Transaction will be divided into individual Components, each with the terms
set forth in this Confirmation, and, in particular, with the Number of Warrants
and Expiration Date set forth in this Confirmation. The payments and deliveries
to be made upon settlement of the Transaction will be determined separately for
each Component as if each Component were a separate Transaction under the
Agreement.

 

 

 

Warrant Style:

 

European

 

 

 

Warrant Type:

 

Call

 

 

 

Seller:

 

Party B

 

 

 

Buyer:

 

Party A

 

 

 

Shares:

 

The common stock of Party B, par value USD 0.01 per share (Ticker Symbol: LWSN).

 

 

 

Number of Warrants:

 

For each Component of the Transaction, as provided in Annex A to this
Confirmation. For the avoidance of doubt, the Number of Options outstanding
shall be reduced by each exercise or expiration of Options hereunder.

 

 

 

Strike Price:

 

USD 15.575

 

 

 

Premium:

 

USD 34,176,000.00

 

 

 

Premium Payment Date:

 

Four Scheduled Trading Days after the Trade Date.

 

 

 

Exchange:

 

The NASDAQ Global Select Market of the Nasdaq Stock Market, Inc.

 

 

 

Related Exchange(s):

 

All Exchanges

 

 

 

Procedures for Exercise:

 

 

 

 

 

In respect of any Component:

 

 

 

 

 

Expiration Time:

 

The Valuation Time

 

 

 

Expiration Date:

 

As provided in Annex A to this Confirmation (or, if such date is not a Scheduled
Trading Day, the next following Scheduled Trading Day that is not already an
Expiration Date for another Component); provided that if that date is a
Disrupted Day, the Expiration Date for such Component shall be the first
succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is
not deemed to be an Expiration Date in respect of any other Component of the
Transaction hereunder; and provided further that if the Expiration Date has not
occurred pursuant to the preceding proviso as of the Final Disruption Date, the
Final Disruption Date shall be the Expiration Date (irrespective of whether

 

Global Deal ID: 3003799

2

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such date is a Disrupted Day or an Expiration Date in respect of any other
Component for the Transaction) and the Settlement Price for the Final Disruption
Date shall be determined by the Calculation Agent in a commercially reasonable
manner. Notwithstanding the foregoing and anything to the contrary in the Equity
Definitions, if a Market Disruption Event occurs on any Expiration Date, the
Calculation Agent may determine that such Expiration Date is a Disrupted Day
only in part, in which case the Calculation Agent shall make adjustments to the
number of Warrants for the relevant Component for which such day shall be the
Expiration Date and shall designate the Scheduled Trading Day determined in the
manner described in the immediately preceding sentence as the Expiration Date
for the remaining Warrants for such Component. Section 6.6 of the Equity
Definitions shall not apply to any Valuation Date occurring on an Expiration
Date.

 

 

 

Automatic Exercise:

 

Applicable with respect to the Warrants included in any Component; provided that
Section 3.4(a) of the Equity Definitions shall apply to Cash Settlement and Net
Share Settlement.

 

 

 

Disrupted Day:

 

The definition of “Disrupted Day” in Section 6.4 of the Equity Definitions shall
be amended by adding the following sentence after the first sentence: “A
Scheduled Trading Day on which a Related Exchange fails to open for trading
during its regular trading session will not be a Disrupted Day if the
Calculation Agent determines that such failure will not have a material impact
on Party A’s ability to unwind any hedging transactions related to the
Transaction.”

 

 

 

Final Disruption Date:

 

September 12, 2012

 

 

 

Market Disruption Event:

 

Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words
“during the one hour period that ends at the relevant Valuation Time, Latest
Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case
may be,” in clause (ii) thereof, and by amending and restating clause (iii)
thereof in its entirety to read as follows: “(iii) an Early Closure that the
Calculation Agent determines is material.”

 

 

 

Settlement Terms:

 

 

 

 

 

In respect of any Component:

 

 

 

 

 

Settlement Currency:

 

USD

 

 

 

Settlement Method Election:

 

Applicable; provided that the same Settlement Method shall apply to all
Components; and provided further that references in the Equity Definitions to
“Physical Settlement” shall be deemed to be references to “Net Share Settlement”
as defined herein; and provided further that Party B may elect Cash Settlement
only if at the time of such election it provides to Party A a written statement
that the representations contained in paragraphs (e) and (g) of “Additional
Representations, Warranties and Agreements of Party B:” below are true and
correct as of and as if made on the date of such election.

 

 

 

Electing Party:

 

Party B

 

 

 

Settlement Method Election Date:

 

Five Scheduled Trading Days prior to, and including, the scheduled Expiration
Date for the Component with the earliest scheduled Expiration Date.

 

3

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Default Settlement Method:

 

Net Share Settlement

 

 

 

Settlement Price:

 

For any Valuation Date, the volume weighted average price per Share for all Rule
10b-18 eligible transactions on the Exchange in the Shares for such Valuation
Date (without regard to pre-open or after hours trading outside of any regular
trading session), as published by Bloomberg at 4:15 P.M. New York City time on
such Valuation Date, or, in the event such price is not so reported on such
Valuation Date for any reason, as reasonably determined by the Calculation Agent
in good faith.

 

 

 

Cash Settlement Terms:

 

 

 

 

 

In respect of any Component:

 

 

 

 

 

Settlement Currency:

 

USD

 

 

 

Net Share Settlement Terms:

 

 

 

 

 

In respect of any Component:

 

 

 

 

 

Net Share Settlement:

 

On each Settlement Date, Party B will deliver to Party A the Net Share Amount
for such Settlement Date (rounded down to the nearest whole Share) and will pay
to Party A the Fractional Share Amount, if any, in respect of the Net Share
Amount.

 

 

 

 

 

The provisions of Sections 9.8, 9.9, 9.11 and 9.12 of the Equity Definitions
will be applicable, except that all references in such provisions to
“Physically-settled” shall be read as references to “Net Share Settled.” “Net
Share Settled” in relation to the Transaction means that Net Share Settlement is
applicable to the Transaction.

 

 

 

Net Share Amount:

 

The Option Cash Settlement Amount divided by the Settlement Price, each
determined as if Cash Settlement applied.

 

 

 

Settlement Date:

 

The Settlement Date, determined as if Physical Settlement applied.

 

 

 

Adjustments:

 

 

 

 

 

In respect of any Component:

 

 

 

 

 

Dividend Adjustment:

 

If at any time during the period from but excluding the Trade Date, to and
including an Expiration Date an ex-dividend date for a cash dividend occurs with
respect to the Shares, and that dividend, combined with any previous cash
dividend for which the ex-dividend date occurs within the same regular quarterly
dividend period of the Issuer, is more than the Regular Dividend on a per share
basis, then the Calculation Agent will adjust the Strike Price, the Number of
Warrants, the Warrant Entitlement, the Number of Shares or any other variable
relevant to the exercise, settlement, payment or other terms of such Component
to reflect the impact of such excess dividend on the theoretical value of such
Component. “Regular Dividend” shall mean USD 0.00 per Share per quarter.

 

 

 

Share Adjustments:

 

 

 

 

 

Method of Adjustment:

 

Calculation Agent Adjustment; provided that the Equity Definitions shall be
amended by replacing the words “diluting or concentrative” in Sections 11.2(a),
11.2(c) (in two instances) and 11.2(e)(vii) with the word “material” and by
adding the words “or the Transactions” after the words “theoretical value of the
relevant Shares” in Sections 11.2(a),

 

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11.2(c) and 11.2(e)(vii); provided further that adjustments may be made to
account for changes in volatility, expected dividends, stock loan rate and
liquidity relative to the relevant Share or the Transaction.

 

 

 

Extraordinary Events:

 

 

 

 

 

Tender Offer Date; Announcement Date:

 

The definitions of “Tender Offer Date” and “Announcement Date” in Section 12.1
of the Equity Definitions will be amended by replacing the words “voting shares”
in the first and fifth line thereof, respectively, with the word “Shares”.

 

 

 

Consequences of Merger Events:

 

 

 

 

 

Share-for-Share:

 

Modified Calculation Agent Adjustment

 

 

 

Share-for-Other:

 

Cancellation and Payment (Calculation Agent Determination)

 

 

 

Share-for-Combined:

 

Cancellation and Payment (Calculation Agent Determination)

 

 

 

Tender Offer:

 

Applicable

 

 

 

 

 

The definition of “Tender Offer” in Section 12.1 of the Equity Definitions will
be amended by replacing the threshold of “10%” in the third line thereof with
“an additional 20% (or such lower amount that would put such entity or person
(or any group (within the meaning of Rule 13d-5 under the Securities Exchange
Act of 1934, as amended) including such entity or person) over 50%)” and by
replacing the phrase “outstanding voting shares of the Issuer” in the fourth
line thereof with “outstanding Shares of the Issuer”.

 

 

 

Consequences of Tender Offers:

 

 

 

 

 

Share-for-Share:

 

Modified Calculation Agent Adjustment

 

 

 

Share-for-Other:

 

Modified Calculation Agent Adjustment

 

 

 

Share-for-Combined:

 

Modified Calculation Agent Adjustment

 

 

 

New Shares:

 

The definition of “New Shares” in Section 12.1 of the Equity Definitions shall
be amended by deleting subsection (i) in its entirety and replacing it with the
following: “(i) publicly quoted, traded or listed on any of the New York Stock
Exchange, the American Stock Exchange, the NASDAQ Global Select Market or the
NASDAQ Global Market (or their respective successors).”

 

 

 

Modified Calculation Agent Adjustment:

 

For greater certainty, the definition of “Modified Calculation Agent Adjustment”
in Sections 12.2 and 12.3 of the Equity Definitions shall be amended by adding
the following italicized language after the stipulated parenthetical provision:
“(including adjustments to account for changes in volatility, expected
dividends, stock loan rate or liquidity relevant to the Shares or to the
Transaction) from the Announcement Date to the Merger Date (Section 12.2) or
Tender Offer Date (Section 12.3).”

 

 

 

Announcement Event:

 

If an Announcement Event occurs, the Calculation Agent will determine the
economic effect of the Announcement Event on the theoretical value of each
Component of the Transaction (including without limitation any change in
volatility, expected dividends, stock loan rate or liquidity relevant to the
Shares or to the Transaction) from the potential Announcement Date to the
Expiration Date for such Component. If such economic effect is material, the
Calculation Agent will adjust the terms of the Transaction to reflect such
economic effect. “Announcement

 

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Event” shall mean the occurrence of a potential Announcement Date of a Merger
Event or Tender Offer.

 

 

 

Nationalization, Insolvency or Delisting:

 

Cancellation and Payment (Calculation Agent Determination)

 

 

 

Delisting:

 

The definition of “Delisting” in Section 12.6 of the Equity Definitions shall be
deleted in its entirety and replaced with the following: “‘Delisting’ means that
the Exchange announces that pursuant to the rules of such Exchange, the Shares
cease (or will cease) to be listed, traded or publicly quoted on the Exchange
for any reason (other than a Merger Event or Tender Offer) and are not
immediately re-listed, re- traded or re-quoted on the New York Stock Exchange,
the American Stock Exchange, the NASDAQ Global Select Market or the NASDAQ
Global Market (or their respective successors); if the Shares are immediately
re-listed, re-traded or re-quoted on any such exchange or quotation system, such
exchange or quotation system shall thereafter be deemed to be the Exchange.”

 

 

 

Additional Disruption Events:

 

 

 

 

 

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” and (ii) immediately following the word “Transaction” in clause
(X) thereof, adding the phrase “in the manner contemplated by the Hedging Party
on the Trade Date.”

 

 

 

Failure to Deliver:

 

Applicable

 

 

 

Insolvency Filing:

 

Applicable

 

 

 

 

 

The definition of “Insolvency Filing” in Section 12.9 of the Equity Definitions
shall be amended by deleting the clause “provided that proceedings instituted or
petitions presented by creditors and not consented to by the Issuer shall not be
deemed an Insolvency Filing” at the end of such definition and replacing it with
the following: “; or it has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors’ rights, or a petition
is presented for its winding-up or liquidation by a creditor and such proceeding
is not dismissed, discharged, stayed or restrained in each case within fifteen
(15) days of the institution or presentation thereof.”

 

 

 

Hedging Disruption:

 

Applicable; provided that Section 12.9(a)(v) of the Equity Definitions is hereby
amended by adding the phrase “for five or more successive Scheduled Trading
Days” immediately following the word “efforts” in the second line thereof.

 

 

 

Increased Cost of Hedging:

 

Not Applicable

 

 

 

Loss of Stock Borrow:

 

Applicable

 

 

 

 

 

Section 12.9(a)(vii) and Section 12.9(b)(iv) of the Equity Definitions are
amended by deleting all references to “a rate equal to or less than the Maximum
Stock Loan Rate” and replacing them with “a Stock Collateral Rate that is equal
to or greater than the Minimum Stock Loan Rate.”

 

 

 

 

 

“Stock Collateral Rate” means the rate of return on collateral posted in
connection with any Shares borrowed in connection with the Transaction,

 

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net of any costs or fees (including, for greater certainty, any lender’s borrow
fees).

 

 

 

Minimum Stock Loan Rate:

 

Zero

 

 

 

Increased Cost of Stock Borrow:

 

Applicable

 

 

 

 

 

Section 12.9(a)(viii) of the Equity Definitions shall be deleted in its entirety
and replaced with the following:

 

 

 

 

 

“Increased Cost of Stock Borrow” means that the Hedging Party would earn a Stock
Collateral Rate that is less than the Initial Stock Loan Rate. For greater
certainty, the Stock Collateral Rate will be deemed to be less than the Initial
Stock Loan Rate if the spread below the applicable floating rate increases above
the spread specified in the definition of Initial Stock Loan Rate.

 

 

 

 

 

Section 12.9(b)(v) of the Equity Definitions is amended by deleting all
references to “a rate equal to or less than the Initial Stock Loan Rate” and
replacing them with “a Stock Collateral Rate that is equal to or greater than
the Initial Stock Loan Rate”.

 

 

 

Initial Stock Loan Rate:

 

FED FUNDS minus 25 basis points, as adjusted by the Calculation Agent to reflect
any subsequent Price Adjustment due to an Increased Cost of Stock Borrow.

 

 

 

FED FUNDS:

 

“FED FUNDS” means USD-Federal Funds-H.15.

 

 

 

Amendment to Section 12.9(b)(i) of Equity Definitions:

 

Section 12.9(b)(i) of the Equity Definitions is hereby amended by adding the
following sentence at the end: “If neither party elects to terminate the
Transaction, the Calculation Agent may adjust the terms of the Transaction upon
the occurrence of such an event pursuant to Modified Calculation Agent
Adjustment (as if such event were a Tender Offer).”

 

 

 

Hedging Party:

 

Party A shall be the Hedging Party for all Extraordinary Events.

 

 

 

Determining Party:

 

Party A shall be the Determining Party for all Extraordinary Events.

 

 

 

Acknowledgments:

 

 

 

 

 

Non-Reliance:

 

Applicable

 

 

 

Agreements and Acknowledgments Regarding Hedging Activities:

 

Applicable

 

 

 

Additional Acknowledgments:

 

Applicable

 

 

 

Additional Representations, Warranties and Agreements of Party A and Party B:

 

In addition to the representations, warranties and agreements set forth in the
Agreement and elsewhere in this Confirmation, each of Party A and Party B
further represents, warrants and agrees that, as of the date hereof:

 

 

 

 

 

(a) (i) It is not entering into the Transaction on behalf of or for the account
of any other person or entity, and will not transfer or assign its rights or
obligations under the Transaction or any portion of such obligations to any
other person or entity except in compliance with applicable laws and the terms
of the Transaction; (ii) it understands that the Transaction is subject to
complex risks which may arise without warning, may at times be volatile, and
that losses may occur quickly and in unanticipated magnitude; (iii) it is
authorized to enter into the Transaction and such action does not violate any
laws of its jurisdiction of organization or residence (including, but not
limited to, any applicable

 

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position or exercise limits set by any self-regulatory organization, either
acting alone or in concert with others) or the terms of any agreement to which
it is a party; (iv) it has consulted with its advisors and has reached its own
conclusions about the Transaction, and any legal, regulatory, tax, accounting,
economic or other consequences arising from the Transaction; and (v) it has
concluded that the Transaction is suitable in light of its own investment
objectives, financial capabilities and expertise.

 

 

 

 

 

(b) At all times until termination of the Transaction, it is an “eligible
contract participant” as the term is defined in Section 1a(12) of the Commodity
Exchange Act, as amended.

 

 

 

Additional Representations, Warranties and Agreements of Party B:

 

In addition to the representations, warranties and agreements set forth in the
Agreement and elsewhere in this Confirmation, Party B further represents,
warrants and agrees that, as of the date hereof:

 

 

 

 

 

(a) Any Shares, when delivered in accordance with the terms of the Transaction,
will be duly authorized and validly issued, fully paid and nonassessable, and
the issuance thereof will not be subject to any preemptive or similar rights.

 

 

 

 

 

(b) Neither Party A nor any of its affiliates has advised it with respect to any
legal, regulatory, tax, accounting, economic or other consequences arising from
the Transaction, and neither Party A nor any of its affiliates is acting as
agent (other than LBI as dual agent if specified above) or advisor for Party B
in connection with the Transaction.

 

 

 

 

 

(c) Each of its required filings under all applicable securities laws have been
filed and, as of the respective dates thereof, there is no misstatement of
material fact contained therein or omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading.

 

 

 

 

 

(d) It has not entered into any obligation that would contractually limit it
from effecting Cash Settlement or Net Share Settlement under the Transaction.

 

 

 

 

 

(e) It is not in possession of any material non-public information concerning
the business, operations or prospects of the Issuer and was not in possession of
any such information at the time of placing any order with respect to the
Transaction.  “Material” information for these purposes is any information to
which an investor would reasonably attach importance in reaching a decision to
buy, sell or hold Shares.

 

 

 

 

 

(f) It shall maintain a number of authorized but unissued Shares that are free
from preemptive rights that at all times exceeds the sum of (x) two times the
Maximum Share Delivery plus (y) the aggregate number of Shares expressly
reserved for any other use (including, without limitation, shares reserved for
issuance upon the exercise of options or convertible debt), whether expressed as
caps or as numbers of Shares reserved or otherwise (clause (y), “Contingently
Issuable Shares”) and, notwithstanding the provisions of Section 5(a)(ii) of the
Agreement, in the event of a failure by Party B to comply with the agreement set
forth in this clause (f), there shall be a grace period of the shorter of 90
calendar days and the time remaining until the earliest scheduled Expiration
Date for remedy of such failure.

 

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(g) It is not entering into the Transaction nor is it making an election
hereunder to create actual or apparent trading activity in the Shares (or any
security convertible into or exchangeable for Shares), to raise, depress or
otherwise manipulate the price of the Shares (or any security convertible into
or exchangeable for Shares) or to facilitate a distribution of Shares (or any
security convertible into or exchangeable for Shares), or otherwise in violation
of the Securities Exchange Act of 1934, as amended, including Regulation M
thereunder.

 

 

 

 

 

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

 

 

 

 

 

(i) Without limiting the generality of Section 13.1 of the Equity Definitions,
it acknowledges that neither Party A nor its affiliates is making any
representations or warranties with respect to the treatment of the Transaction
under FASB Statement 133, as amended, or 150, EITF Issue No. 00-19 (or any
successor issue statement) or under FASB’s Liabilities & Equity Project.

Other Provisions:

 

 

 

 

 

Calculation Agent:

 

LBI; provided that the definition of “Calculation Agent” in Section 1.40 of the
Equity Definitions shall apply, and all determinations or calculations made by
the Calculation Agent shall be made in good faith and in a commercially
reasonable manner using consistent methodology with respect to the Transaction.
In the event of a good faith error, and upon becoming aware of such error, the
Calculation Agent shall promptly correct such error. Following any calculation
by the Calculation Agent hereunder, promptly following the written request by
Party B, the Calculation Agent will provide to Party B a written report
describing in reasonable detail the basis for such calculation, including, upon
the reasonable request of Party B, the material data and assumptions; provided
further that no transferee of the Transaction in accordance with the terms of
this Confirmation shall act as the Calculation Agent with respect to such
transferred Transaction without the prior written consent of Party B, which will
not be unreasonably withheld or delayed.

 

 

 

Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events:

 

If, in respect of the Transaction, an amount is payable by Party B to Party A,
(i) pursuant to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity
Definitions (except in the event of a Nationalization, Insolvency, Tender Offer
or a Merger Event, in each case, in which the consideration to be paid to
holders of Shares consists solely of cash) or (ii) pursuant to Section 6(d)(ii)
of the Agreement (except in the event of an Event of Default in which Party B is
the Defaulting Party or a Termination Event in which Party B is the Affected
Party, in each case, that resulted from an event or events within Party B’s
control) (a “Payment Obligation”), Party B shall have the right, in its sole
discretion, to satisfy any such Payment Obligation by the Share Termination
Alternative (as defined below) by giving irrevocable telephonic notice to Party
A, confirmed in writing within one Currency Business Day, no later than 4:00
p.m. New York City time on the Merger Date, Tender Offer Date, Announcement
Date, Early Termination Date or date of cancellation or termination for an
Additional Disruption Event, as applicable (“Notice of Share Termination”). 
Upon Notice of Share Termination the following provisions shall apply:

 

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Share Termination Alternative:

 

Applicable and means that Party B shall deliver to Party A the Share Termination
Delivery Property on the date when the 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, or such later date as the Calculation
Agent may reasonably determine (the “Share Termination Payment Date”), in
satisfaction of the Payment Obligation.

 

 

 

Share Termination Delivery Property:

 

A number of Share Termination Delivery Units, as calculated by the Calculation
Agent, equal to the Payment Obligation divided by the Share Termination Unit
Price. The Calculation Agent shall adjust the Share Termination Delivery
Property by replacing any fractional portion of 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 Party A of property contained in one Share Termination Delivery
Unit on the date such Share Termination Delivery Units are to be delivered as
Share Termination Delivery Property, as reasonably determined by the Calculation
Agent.

 

 

 

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 Nationalization, Insolvency,
Merger Event or Tender Offer, a unit consisting of the number or amount of each
type of property received by a holder of one Share (without consideration of any
requirement to pay cash or other consideration in lieu of fractional amounts of
any securities) in such Nationalization, Insolvency, Merger Event or Tender
Offer, as reasonably determined by the Calculation Agent. If a Share Termination
Delivery Unit consists of property other than cash or New Shares and if Party B
provides irrevocable written notice to the Calculation Agent on or prior to the
Merger Date that it elects to deliver cash, New Shares or a combination thereof
(in such proportion as Party B designates) in lieu of such other property, the
Calculation Agent will replace such property with cash, New Shares or a
combination thereof as components of a Share Termination Delivery Unit in such
amounts, as reasonably determined by the Calculation Agent, as shall have a
value equal to the value of the property so replaced. If such Nationalization,
Insolvency, Merger Event or Tender Offer 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.

 

 

 

Other Applicable Provisions:

 

If the Transaction is to be Share Termination Settled, the provisions of
Sections 9.8, 9.9, 9.11 and 9.12 (as modified above) of the Equity Definitions
will be applicable, except that all references in such provisions to
“Physically-settled” shall be read as references to “Share Termination Settled”
and all references to “Shares” shall be read as references to “Share Termination
Delivery Units”. “Share Termination Settled” in relation to the Transaction
means that the Share Termination Alternative set forth above is applicable to
the Transaction.

 

 

 

Additional Termination Events:

 

If at any time Party A reasonably and in good faith determines, upon the
reasonable advice of counsel, that it is advisable to terminate a portion of the
Transaction so that Party A’s related hedging activities will comply with
applicable securities laws, rules or regulations, an Additional Termination
Event shall occur in respect of which (1) Party B shall be the sole Affected
Party and (2) the Transaction shall be the sole Affected

 

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Transaction.

 

 

 

Payments on Early Termination:

 

Party A and Party B agree that for the Transaction, for the purposes of Section
6(e) of the Agreement, Loss and the Second Method will apply.

 

 

 

Status of Claims in Bankruptcy:

 

Party A acknowledges and agrees that this Confirmation is not intended to convey
to it rights with respect to the Transaction that are senior to the claims of
common stockholders in any U.S. bankruptcy proceedings of Party B; provided that
nothing herein shall limit or shall be deemed to limit Party A’s right to pursue
remedies in the event of a breach by Party B of its obligations and agreements
with respect to the Transaction; and provided further that nothing herein shall
limit or shall be deemed to limit Party A’s rights in respect of any
transactions other than the Transaction.

 

 

 

No Set-Off or Netting:

 

Obligations under this Transaction shall not be netted, recouped or set off
(including pursuant to Section 6 of the Agreement) against any other obligations
of the parties, whether arising under the Agreement, this Confirmation, under
any other agreement between the parties hereto, by operation of law or
otherwise, and no other obligations of the parties shall be netted, recouped or
set off (including pursuant to Section 6 of the Agreement) against obligations
under this Transaction, whether arising under the Agreement, this Confirmation,
under any other agreement between the parties hereto, by operation of law or
otherwise, and each party hereby waives any such right of setoff, netting or
recoupment.

 

 

 

Bankruptcy Code Acknowledgments:

 

The parties agree and acknowledge that (i) this Confirmation is of a type set
forth in Section 561(a)(1)–(5) of the U.S. Bankruptcy Code (the “Bankruptcy
Code”); (ii) Party A is a “master netting agreement participant,” a “financial
institution,” a “financial participant,” a “forward contract merchant” and a
“swap participant” as defined in the Bankruptcy Code; (iii) the remedies
provided herein are the remedies referred to in Section 561(a), Sections
362(b)(6), (7), (17) and (27), and Section 362(o) of the Bankruptcy Code; (iv)
all transfers of cash, securities or other property under or in connection with
this Confirmation are “transfers” made “by or to (or for the benefit of)” a
“master netting agreement participant,” a “financial institution,” a “financial
participant,” a “forward contract merchant” or a “swap participant” (each as
defined in the Bankruptcy Code) within the meaning of Sections 546(e), (f), (g)
or (j) of the Bankruptcy Code; and (v) all obligations under or in connection
with this Confirmation represent obligations in respect of “termination values,”
“payment amounts” or “other transfer obligations” within the meaning of Sections
362, 560 and 561 of the Bankruptcy Code.

 

 

 

Limit on Beneficial Ownership:

 

Notwithstanding any other provisions hereof, Party A may not exercise any
Warrant hereunder, Automatic Exercise shall not apply with respect thereto, and
any delivery pursuant to “Alternative Calculations and Payment on Early
Termination and on Certain Extraordinary Events” above shall not be made to the
extent (but only to the extent) that the receipt of any Shares upon exercise or
delivery would result in Lehman Brothers Holdings Inc. (“Holdings”) directly or
indirectly beneficially owning (as such term is defined for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended) at any time in excess
of 9.0% of the outstanding Shares. Any purported delivery hereunder shall be
void and have no effect to the extent (but only to the extent) that such
delivery would result in Holdings directly or indirectly so beneficially owning
in excess of 9.0% of the outstanding Shares. If any delivery owed

 

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to Party A hereunder is not made, in whole or in part, as a result of this
provision, Party B’s obligation to make such delivery and Party A’s right to
exercise a Warrant shall not be extinguished and Party B shall make such
delivery as promptly as practicable after, but in no event later than one
Clearance System Business Day after, Party A gives notice to Party B that such
exercise or delivery would not result in Holdings directly or indirectly so
beneficially owning in excess of 9.0% of the outstanding Shares.

 

 

 

Status of New Delivered Securities:

 

If, in the reasonable judgment of Party A, upon the reasonable advice of
counsel, any Shares or Share Termination Delivery Units, as the case may be
(either, “Delivered Securities”), deliverable to Party A hereunder would not be
immediately freely transferable by Party A under Rule 144(k) under the
Securities Act of 1933, as amended (the “Securities Act”), then the provisions
set forth below shall apply:

 

At the election of Party B, which election shall be in writing and shall be
delivered to Party A no later than the date ten Scheduled Trading Days prior to
the date such Delivered Securities are required to be delivered (if Party B
makes no election by such date, Party B shall be deemed to have made the
election described in clause (ii) below), either:

 

 

 

 

 

(i) All Delivered Securities, delivered by Party B to Party A shall be, at the
time of such delivery, covered by an effective registration statement of the
Issuer for immediate resale by Party A (such registration statement and the
corresponding prospectus (the “Prospectus”) (including, without limitation, any
sections describing the plan of distribution) in form and content commercially
reasonably satisfactory to Party A); or

 

 

 

 

 

(ii) Party B shall deliver Delivered Securities that are not so registered. If
Party B makes the election described in clause (i) above:

 

 

 

 

 

(a) Party A (or an Affiliate of Party A designated by Party A) shall be afforded
a reasonable opportunity to conduct a due diligence investigation with respect
to the Issuer that is customary in scope for underwritten offerings of equity
securities and that, if requested by Party A or such Affiliate, results in
appropriate disclosure or other corrective action that is commercially
reasonably satisfactory to Party A or such Affiliate, as the case may be; and

 

 

 

 

 

(b) Party A (or an Affiliate of Party A designated by Party A) and the Issuer
shall enter into an agreement (a “Registration Agreement”) on commercially
reasonable terms in connection with the public resale of such Delivered
Securities by Party A or such Affiliate substantially similar to underwriting
agreements customary for underwritten offerings of equity securities, in form
and substance commercially reasonably satisfactory to Party A or such Affiliate
and the Issuer, which Registration Agreement shall include, without limitation,
provisions substantially similar to those contained in such underwriting
agreements relating to the indemnification of, and contribution in connection
with the liability of, Party A and its Affiliates and the Issuer, shall provide
for the payment by the Issuer of all expenses in connection with such resale,
including all registration costs and all fees and expenses of counsel for Party
A, and shall provide for the delivery of accountants’ “comfort letters” to Party
A or such Affiliate with respect to the financial statements and certain
financial information contained in or incorporated

 

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by reference into the Prospectus.

 

 

 

 

 

If Party B makes the election described in clause (ii) above:

 

 

 

 

 

(a) All Delivered Securities shall be delivered to Party A (or any Affiliate of
Party A designated by Party A) pursuant to the exemption from the registration
requirements of the Securities Act provided by Section 4(2) thereof;

 

 

 

 

 

(b) Party A (or an Affiliate of Party A designated by Party A) and any potential
institutional purchaser of any such Delivered Securities from Party A or such
Affiliate identified by Party A shall be afforded a commercially reasonable
opportunity to conduct a due diligence investigation in compliance with
applicable law with respect to the Issuer customary in scope for private
placements of equity securities;

 

 

 

 

 

(c) Party A (or an Affiliate of Party A designated by Party A) and the Issuer
shall enter into an agreement (a “Private Placement Agreement”) on commercially
reasonable terms in connection with the private placement of such Delivered
Securities by the Issuer to Party A or such Affiliate and the private resale of
such shares by Party A or such Affiliate, substantially similar to private
placement purchase agreements customary for private placements of equity
securities, in form and substance commercially reasonably satisfactory to Party
A and the Issuer, which Private Placement Agreement shall include, without
limitation, provisions substantially similar to those contained in such private
placement purchase agreements relating to the indemnification of, and
contribution in connection with the liability of, Party A and its Affiliates and
the Issuer, shall provide for the payment by the Issuer of all expenses in
connection with such resale, including all fees and expenses of counsel for
Party A, shall contain representations, warranties and agreements of the Issuer
reasonably necessary or, based upon the reasonable advice of counsel, advisable
to establish and maintain the availability of an exemption from the registration
requirements of the Securities Act for such resales, and shall provide for the
delivery of accountants’ “comfort letters” to Party A or such Affiliate with
respect to the financial statements and certain financial information contained
in or incorporated by reference into the offering memorandum prepared for the
resale of such Delivered Securities;

 

 

 

 

 

(d) Party B agrees that any Delivered Securities so delivered to Party A or its
Affiliates, (i) unless otherwise prohibited by law, may be transferred by and
among Party A and its Affiliates, and the Issuer shall effect such transfer
without any further action by Party A and (ii) after the minimum “holding
period” within the meaning of Rule 144(k) under the Securities Act has elapsed
with respect to such Delivered Securities, Issuer shall promptly remove, or
cause the transfer agent for such Delivered Securities to remove, any legends
referring to any such restrictions or requirements from such Delivered
Securities upon delivery by Party A (or such Affiliate of Party A) to Issuer or
such transfer agent of seller’s and broker’s representation letters customarily
delivered by Party A in connection with resales of restricted securities
pursuant to Rule 144 under the Securities Act, without any further requirement
for the delivery of any certificate, consent, agreement, opinion of counsel,
notice or any other document, any transfer tax stamps or payment of any other
amount or any other action by Party A (or such Affiliate of Party

 

13

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A); and

 

 

 

 

 

(e) Party B shall be required to deliver an additional number of Delivered
Securities so that the aggregate value of the Delivered Securities, as
determined by the Calculation Agent to reflect an appropriate liquidity
discount, equals the value of the number of Delivered Securities that would
otherwise be deliverable if such Delivered Securities were freely tradable upon
receipt by Party A (the “Settlement Value”).

 

 

 

 

 

(For the avoidance of doubt, as used in this section only, the term “Issuer”
shall mean the issuer of the relevant securities, as the context shall require.)

 

 

 

Make Whole Shares:

 

If (x) Party B elects to deliver Share Termination Delivery Units pursuant to
“Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events” above or (y) Party B makes the election described in
clause (ii) under “Status of New Delivered Securities” above, then in either
case Party A or its affiliate may sell such Shares or Share Termination Delivery
Units, as the case may be, during a period (the “Resale Period”) commencing on
the Exchange Business Day following delivery of such Shares or Share Termination
Delivery Units, as the case may be, and ending on the Exchange Business Day on
which Party A completes the sale of all such Shares or Share Termination
Delivery Units, as the case may be, or a sufficient number of Shares or Share
Termination Delivery Units, as the case may be, so that the realized net
proceeds of such sales exceed the amount of the Payment Obligation (in the case
of clause (x), or in the case that both clause (x) and clause (y) apply) or the
Settlement Value (in the case that only clause (y) applies) (such amount of the
Payment Obligation or Settlement Value, as the case may be, the “Required
Proceeds”). If any of such delivered Shares or Share Termination Delivery Units
remain after such realized net proceeds exceed the Required Proceeds, Party A
shall return such remaining Shares or Share Termination Delivery Units to Party
B. If the Required Proceeds exceed the realized net proceeds from such resale,
Party B shall transfer to Party A by the open of the regular trading session on
the Exchange on the Exchange Trading Day immediately following the last day of
the Resale Period the amount of such excess (the “Additional Amount”) in cash or
in a number of additional Shares or Share Termination Delivery Units, as the
case may be (“Make-whole Shares”), in an amount that, based on the market value
of such Make- whole Shares, as determined by the Calculation Agent, on the last
day of the Resale Period, has a dollar value equal to the Additional Amount. The
Resale Period shall continue to enable the sale of the Make-whole Shares in the
manner contemplated by this section. This provision shall be applied
successively until the Additional Amount is equal to zero, subject to “Maximum
Share Delivery” below.

 

 

 

Maximum Share Delivery:

 

Notwithstanding any provision of this Confirmation to the contrary, the number
of Shares that may be delivered by Party B hereunder will be limited to the
total Shares authorized but not outstanding, reduced by the total amount of
Contingently Issuable Shares. In any event, the number of Shares that may be
delivered by Party B hereunder shall not exceed two times the Number of Shares
(as adjusted). If the number of Shares to be otherwise deliverable by Party B
exceeds the limit in the preceding sentences, Party B will use its best efforts
to obtain all necessary approvals to issue additional Shares to enable it to
satisfy all obligations

 

14

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hereunder.

 

 

 

Transfer:

 

Notwithstanding Section 7 of the Agreement, Party A may assign its rights and
obligations under the Transaction and under the Agreement, in whole and not in
part, at any time to any person or entity whatsoever without the consent of
Party B.

 

 

 

Regulatory Provisions:

 

(a) Party B represents and warrants that it has received and read and
understands the Notice of Regulatory Treatment and the OTC Option Risk
Disclosure Statement.

 

 

 

 

 

(b) The Agent will furnish Party B upon written request a statement as to the
source and amount of any remuneration received or to be received by the Agent in
connection with the Transaction evidenced hereby.

 

 

 

Tax:

 

Notwithstanding any other provision in this Confirmation, Party A hereby
confirms that no participant in this transaction shall be limited from
disclosing the U.S. tax treatment or U.S. tax structure of the transaction.

 

 

 

Governing Law:

 

The laws of the State of New York (without reference to choice of law doctrine).

 

 

 

Termination Currency:

 

USD.

 

 

 

Office:

 

For the purposes of the Transaction, Party A is not a Multibranch Party, and
Party B is not a Multibranch Party.

 

 

 

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 the other 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.

 

 

 

Conditions to Effectiveness:

 

The Transaction shall not be effective unless (i) Party A shall have received a
written opinion or written opinions of counsel, reasonably acceptable to Party A
in form and substance, on or before the Trade Date, to the effect that:  (a)
this Confirmation has been duly authorized, executed and delivered by Party B;
(b) the performance by Party B of this Confirmation is within the corporate
powers and authority of Party B, and has been duly authorized by all necessary
corporate or other action; and (c) the execution, delivery and performance of
this Confirmation by Party B do not contravene or constitute a default under any
provision of the certificate of incorporation or bylaws of Party B; and (ii) the
sale of the Convertible Notes is consummated by the close of business in New
York on April 23, 2007 (or such later date as agreed upon by the parties) with
the initial purchaser of the Convertible Notes. “Convertible Notes” means the
2.50% senior convertible notes due April 15, 2012 issued by Party B pursuant to
an Indenture to be dated on or about April 23, 2007 between Party B and The Bank
of New York, as trustee.

 

15

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THE SECURITIES REPRESENTED BY THIS CONFIRMATION HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933 OR ANY OTHER UNITED STATES FEDERAL OR STATE SECURITIES LAWS; SUCH
SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
APPROPRIATE REGISTRATION UNDER SUCH SECURITIES LAWS OR EXCEPT IN A TRANSACTION
EXEMPT FROM OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF SUCH SECURITIES
LAWS.

Please confirm your agreement with the foregoing by executing this Confirmation
and returning such Confirmation, in its entirety, to us at facsimile number
646-885-9546 (United States of America), Attention: Documentation.

Yours sincerely,

Accepted and agreed to:

 

 

Lehman Brothers OTC Derivatives Inc.

Lawson Software, Inc.

 

 

 

 

By:

 

/s/ Anatoly Kozlov

 

By:

/s/ Robert A. Schriesheim

 

Name:

Anatoly Kozlov

Name:

Robert A. Schriesheim

Title:

Authorized Signatory

Title:

EVP & CFO

 

Execution time will be furnished upon Party B’s written request.

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