Exhibit 10.2

 

[GOLDMAN SACHS & CO. LLC | 200 WEST STREET | NEW YORK, NEW YORK 10282-2198 |
TEL: 212-902-1000]1

 

[Barclays Bank PLC

5 The North Colonnade

Canary Wharf, London E14 4BB

Facsimile: +44(20)77736461

Telephone: +44 (20) 777 36810

 

c/o Barclays Capital Inc.

as Agent for Barclays Bank PLC

745 Seventh Avenue

New York, NY 10019

Telephone: +1 212 412 4000]2

 

 

[__________], 2020

 

To:Enphase Energy, Inc.
47281 Bayside Parkway
Fremont, CA 94538
Attention: General Counsel
Telephone No.: (707) 774-7000

 

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
[Barclays Bank PLC][Goldman Sachs & Co. LLC] (“Dealer”)[, through its agent
Barclays Capital Inc. (the “Agent”)]3 and Enphase Energy, 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. This Confirmation shall replace any previous agreements and
serve as the final documentation for the Transaction. [Dealer is not a member of
the Securities Investor Protection Corporation. Dealer is authorized by the
Prudential Regulation Authority and regulated by the Financial Conduct Authority
and the Prudential Regulation Authority.]4

 

 

1 Include for GS.

2 Include for Barclays.

3 Include for Barclays.

4 Include for Barclays.

 

 

 

 

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
[________], 2020 (the “Offering Memorandum”) relating to the Convertible Senior
Notes due 2025 (as originally issued by Counterparty, the “Convertible Notes”
and each USD 1,000 principal amount of Convertible Notes, a “Convertible Note”)
issued by Counterparty in an aggregate initial principal amount of USD
[_________] (as increased by [up to]5 an aggregate principal amount of USD
[_________] [if and to the extent that]6 [pursuant to the exercise by]7 the
Initial Purchasers (as defined herein) [exercise]8[of]9 their over-allotment
option to purchase additional Convertible Notes pursuant to the Purchase
Agreement (as defined herein)) pursuant to an Indenture [to be]10 dated
[________], 2020 between Counterparty and U.S. Bank National Association, as
trustee (the “Indenture”). In the event of any inconsistency between the terms
defined in the Offering Memorandum, the Indenture and this Confirmation, this
Confirmation shall govern. The parties acknowledge that this Confirmation is
entered into on the date hereof with the understanding that (i) definitions set
forth in the Indenture which are also defined herein by reference to the
Indenture and (ii) sections of the Indenture that are referred to herein will
conform to the descriptions thereof in the Offering Memorandum. If any such
definitions in the Indenture or any such sections of the Indenture differ from
the descriptions thereof in the Offering Memorandum, the descriptions thereof in
the Offering Memorandum will govern for purposes of this Confirmation. The
parties further acknowledge that the Indenture section numbers used herein are
based on the [draft of the Indenture last reviewed by Dealer as of the date of
this Confirmation, and if any such section numbers are changed in the Indenture
as executed, the parties will amend this Confirmation in good faith to preserve
the intent of the parties]11[Indenture as executed]12. 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 following such
date (other than any amendment pursuant to Section [10.01(m)]13 of the Indenture
that, as determined by the Calculation Agent, conforms the Indenture to the
description of Convertible Notes in the Offering Memorandum), any such amendment
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) and (ii) the
election that the “Cross Default” provisions of Section 5(a)(vi) of the
Agreement shall apply to Dealer, with a “Threshold Amount” of 3% of
shareholders’ equity of [Dealer]14[The Goldman Sachs Group, Inc. (“Dealer
Parent”)]15(provided that (a) the phrase “, or becoming capable at such time of
being declared,” shall be deleted from clause (1) of such Section 5(a)(vi) of
the Agreement, (b) “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 and (c) the following sentence shall be added to the end of Section
5(a)(vi) of the Agreement: “Notwithstanding the foregoing, a default under
subsection (2) hereof shall not constitute an Event of Default if (i) the
default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the relevant party to
make the payment when due; and (iii) the payment is made within two Local
Business Days of such party’s receipt of written notice of its failure to
pay.”)) 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.

 

 

5 Include in the Base Call Option Confirmation.

6 Include in the Base Call Option Confirmation.

7 Include in the Additional Call Option Confirmation.

8 Include in the Base Call Option Confirmation.

9 Include in the Additional Call Option Confirmation.

10 Insert if Indenture is not completed at the time of the Confirmation.

11 Include in the Base Call Option Confirmation. Include in the Additional Call
Option Confirmation if it is executed before closing of the base deal.

12 Include in the Additional Call Option Confirmation, but only if the
Additional Call Option Confirmation is executed after closing of the base deal.

13 Include cross-reference to Indenture section permitting amendments without
holder consent to conform the Indenture to the Description of Notes.

14 Include if Barclays.

15 Include if GS.

 

 2 

 

 

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

 

General Terms.

Trade Date: [__________], 2020 Effective Date: The closing date of the
[initial]16 issuance of the Convertible Notes [issued pursuant to the option to
purchase additional Convertible Notes exercised on the date hereof]17 Option
Style: “Modified American”, as described under “Procedures for Exercise” below
Option Type: Call Buyer: Counterparty Seller: Dealer Shares: The common stock of
Counterparty, par value USD 0.00001 per share (Exchange symbol “ENPH” as of the
Trade Date). Number of Options: [_______]18.  For the avoidance of doubt, the
Number of Options shall be reduced by any Options exercised by Counterparty.  In
no event will the Number of Options be less than zero. Applicable Percentage:
[__]% Option Entitlement: A number equal to the product of the Applicable
Percentage and [______]19. Strike Price: USD [______] Premium: USD [______]
Premium Payment Date: [__________], 2020 Exchange: The NASDAQ Global Market
Related Exchange(s): All Exchanges; provided that Section 1.26 of the Equity
Definitions shall be amended to add the words “United States” before the word
“exchange” in the tenth line of such section. Excluded Provisions: Section
[14.04(h)]20  and Section [14.03]21 of the Indenture.

 

 

16 Include for Base Call Option Confirmation.

17 Include for Additional Call Option Confirmation.

18 For the Base Call Option Confirmation, this is equal to the number of
Convertible Notes in principal amount of $1,000 initially issued on the closing
date for the Convertible Notes. For the Additional Call Option Confirmation,
this is equal to the number of additional Convertible Notes in principal amount
of $1,000.

19 Insert the initial Conversion Rate for the Convertible Notes.

20 Include cross-reference to section(s) of the Indenture containing
discretionary adjustments to the Conversion Rate by Counterparty.

21 Include cross-reference to Indenture section(s) dealing with make-whole
adjustments to the Conversion Rate.

 

 3 

 

 

Procedures for Exercise.   Conversion Date: With respect to any conversion of a
Convertible Note, the date on which the Holder (as such term is defined in the
Indenture) of such Convertible Note satisfies all of the requirements for
conversion thereof as set forth in Section [14.02(b)]22  of the Indenture.
Averaging Period Threshold Date: September 1, 2024 Expiration Time: The
Valuation Time Expiration Date: March 1, 2025, 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 Conversion Date in respect of which a Notice of Conversion that is
effective as to Counterparty has been delivered by the relevant converting
Holder, a number of Options equal to [(i)] the number of Convertible Notes in
denominations of USD 1,000 as to which such Conversion Date has occurred [minus
(ii) the number of Options that are or are deemed to be automatically exercised
on such Conversion Date under the Base Call Option Transaction Confirmation
letter agreement dated [__________], 2020  between Dealer and Counterparty (the
“Base Call Option Confirmation”),]23 shall be deemed to be automatically
exercised; provided that such Options shall be exercised or deemed exercised
only if Counterparty or the Trustee (or other agent authorized by Counterparty
and previously identified to Dealer by Counterparty in writing) on behalf of
Counterparty has provided a Notice of Exercise to Dealer in accordance with
“Notice of Exercise” below; provided further that if the Trustee or any other
such agent on behalf of Counterparty provides such Notice of Exercise to Dealer,
Dealer shall be entitled to rely on the accuracy of such Notice of Exercise
without any independent investigation.   Notwithstanding the foregoing, in no
event shall the number of Options that are exercised or deemed exercised
hereunder exceed the Number of Options.

 

 

22 Include cross-reference to section(s) of the Indenture setting forth the
requirements for conversion of the Convertible Notes.

23 Include for Additional Call Option Confirmation only.

 

 4 

 

 

Notice of Exercise: Notwithstanding anything to the contrary in the Equity
Definitions or under “Automatic Exercise” above, in order to exercise any
Options, Counterparty or the Trustee (or other agent authorized by Counterparty
and previously identified to Dealer by Counterparty in writing) on behalf of
Counterparty must notify Dealer in writing before 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 the Options being exercised (the “Exercise
Notice Deadline”) of (i) the number of such Options, (ii) the scheduled first
day of the Settlement Averaging Period and the scheduled Settlement Date, (iii)
in respect of any Options relating to Convertible Notes with a Conversion Date
occurring on or after the date Counterparty satisfies the “[Share Reservation
Condition]” (as defined in the Indenture), (a) the Relevant Settlement Method
for such Options, and (b) if the settlement method for the related Convertible
Notes is not Settlement in Shares or Settlement in Cash (each as defined below),
the fixed amount of cash per Convertible Note that Counterparty has elected to
pay to Holders (as such term is defined in the Indenture) of the related
Convertible Notes (the “Specified Cash Amount”); provided that notwithstanding
the foregoing, in respect of any Options relating to Convertible Notes with a
Conversion Date occurring prior to the Averaging Period Threshold Date, such
notice (and the related exercise of Options) shall be effective if given after
the Exercise Notice Deadline, but prior to 4:00 p.m. (New York City time) on the
fifth Scheduled Valid Day following the Exercise Notice Deadline, in which event
the Calculation Agent shall have the right to adjust the delivery obligation
under this Confirmation as appropriate to reflect the commercially reasonable
additional costs (including, but not limited to, additional costs related to
hedging mismatches and market losses and gains) and commercially reasonable
expenses incurred by Dealer in connection with commercially reasonable hedging
activities (including the unwinding of any commercially reasonable Hedge
Positions) as a result of Dealer not having received such notice on or prior to
the Exercise Notice Deadline and Dealer’s obligation to make any payment or
delivery in respect of such exercise shall not be extinguished; and provided
further that in respect of any Options relating to Convertible Notes with a
Conversion Date occurring on or after the Averaging Period Threshold Date, (A)
such notice may be given on or prior to the second Scheduled Valid Day
immediately preceding the Expiration Date and need only specify the information
required in clause (i) above, and (B) if Counterparty satisfies the “[Share
Reservation Condition]” (as defined in the Indenture), 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 Convertible Notes before 5:00 p.m. (New York
City time) on the Averaging Period Threshold Date specifying the information
required in clauses (iii) and (iv) above.  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 Convertible Notes. The parties hereto agree and acknowledge that
if the Trustee or any other agent authorized by Counterparty and previously
identified to Dealer by Counterparty in writing on behalf of Counterparty
provides notice to Dealer as provided for in the second immediately preceding
sentence, Dealer shall be entitled to rely on the accuracy of such notice
without any independent investigation.

 

 5 

 

 

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 good faith and in a
commercially reasonable manner. 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 (i) relating to a
Convertible Note with a Conversion Date occurring prior to the date Counterparty
satisfies the “[Share Reservation Condition]” (as defined in the Indenture),
Cash Settlement and (ii) otherwise, Net Share Settlement; provided that, in the
case of clause (ii), 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, or the
Trustee (or other agent authorized by Counterparty and previously identified to
Dealer by Counterparty in writing) on behalf of Counterparty, shall have
notified Dealer of the Relevant Settlement Method in the Notice of Exercise or
Notice of Final Settlement Method, as applicable, for such Option.  The parties
hereto agree and acknowledge that if the Trustee or any other agent authorized
by Counterparty and previously identified to Dealer by Counterparty in writing
on behalf of Counterparty provides notice to Dealer as provided for in the
proviso to the immediately preceding sentence, Dealer shall be entitled to rely
on the accuracy of such notice without any independent investigation.

 

 6 

 

 

Relevant Settlement Method: In respect of any Option: (i)  if Counterparty has
elected to settle its conversion obligations in respect of the related
Convertible Note (A) entirely in Shares pursuant to Section [14.02(iv)(A)]24  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 [14.04(iv)(C)]25  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
[14.04(iv)(C)]26 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
conversion obligations in respect of the related Convertible Note in a
combination of cash and Shares pursuant to Section [14.04(iv)(C)]27 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 conversion obligations in respect of the
related Convertible Note entirely in cash pursuant to Section [14.04(iv)(B)]28
 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 Share Amount valued at the Relevant Price for the last
Valid Day of the Settlement Averaging Period.

 

 

24 Include cross-reference to section of the Indenture containing provisions for
full physical settlement of the Convertible Notes.

25 Include cross-reference to section of the Indenture containing provisions for
combination settlement of the Convertible Notes.

26 Include cross-reference to section of the Indenture containing provisions for
combination settlement of the Convertible Notes.

27 Include cross-reference to section of the Indenture containing provisions for
combination settlement of the Convertible Notes.

28 Include cross-reference to section of the Indenture containing provisions for
cash settlement of the Convertible Notes.

 

 7 

 

 

Combination Settlement: If Combination Settlement is applicable to any Option
exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case
may be, to Counterparty, on the relevant Settlement Date for each such Option:
(i)       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; provided that in no event shall the
Cash Settlement Amount exceed the Applicable Limit for such Option.

 

 8 

 

 

Daily Option Value: For any Valid Day, an amount equal to (i) the Option
Entitlement on such Valid Day, multiplied by (ii) the 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 a conversion of Convertible Notes for which additional
Shares will be added to the “Conversion Rate” (as defined in the Indenture) as
determined pursuant to Section [14.03]29 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]30 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  Conversion 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]31 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 Convertible Note upon
conversion of such Convertible Note and (B) the number of Shares, if any,
delivered to the Holder of the related Convertible Note upon conversion of such
Convertible Note multiplied by the Applicable Limit Price on the  Settlement
Date for such Option, over (ii) USD 1,000. Applicable Limit Price: On any day,
the opening price as displayed under the heading “Op” on Bloomberg page ENPH
<equity> (or any successor thereto).

 

 

29 Include cross-reference to Indenture section(s) dealing with make-whole
adjustments to the Conversion Rate.

30 Include cross-reference to Indenture section(s) dealing with make-whole
adjustments to the Conversion Rate.

31 Include cross-reference to Indenture section(s) dealing with make-whole
adjustments to the Conversion Rate.

 

 9 

 

 

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.32 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.33 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.34 Relevant Price: On any Valid
Day, the per Share volume-weighted average price as displayed under the heading
“Bloomberg VWAP” on Bloomberg page ENPH <equity> AQR (or its equivalent
successor if such page is not available) in respect of the period from the
scheduled opening time of the Exchange to the Scheduled Closing Time of the
Exchange on such Valid Day (or if such volume-weighted average price is
unavailable, the market value of one Share on such Valid Day, as determined by
the Calculation Agent in good faith and in a commercially reasonable manner
using, if practicable, a volume-weighted average method).  The Relevant Price
will be determined without regard to after-hours trading or any other trading
outside of the regular trading session trading hours. Settlement Averaging
Period: For any Option and regardless of the Settlement Method applicable to
such Option: (i)       if the related Conversion Date occurs prior to the
Averaging Period Threshold Date, the [20]35 consecutive Valid Days commencing
on, and including, the second Valid Day following such Conversion Date; or
(ii)      if the related Conversion Date occurs on or following the Averaging
Period Threshold Date, the [20]36 consecutive Valid Days commencing on, and
including, the [21]st Scheduled Valid Day immediately prior to the Expiration
Date.

 

 

32 To confirm that the definition matches the definition used in the Convertible
Notes.

33 To confirm that the definition matches the definition used in the Convertible
Notes.

34 To confirm that the definition matches the definition used in the Convertible
Notes.

35 To be the number of Valid Days that is equal to the number of trading days in
the observation period for the Convertible Notes.

36 To be the number of Valid Days that is equal to the number of trading days in
the observation period for the Convertible Notes.

 

 10 

 

 

Settlement Date: For any Option, the date cash is paid and Shares, if any, are
delivered under the terms of the Indenture with respect to the conversion of the
Convertible Note related to 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 issuer of the Shares under applicable securities laws, (ii) Dealer may
deliver any Shares required to be delivered hereunder in certificated form in
lieu of delivery through the Clearance System and (iii) any Shares delivered to
Counterparty may be “restricted securities” (as defined in Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”)).

 

3.Additional Terms applicable to the Transaction.

 

Adjustments applicable to the Transaction:

Potential Adjustment Events: Notwithstanding Section 11.2(e) of the Equity
Definitions, a “Potential Adjustment Event” means an occurrence of any event or
condition, as set forth in any Dilution Adjustment Provision, that would result
in an adjustment under the Indenture to the “Conversion Rate” or the composition
of a “unit of Reference Property” or to any “Last Reported Sale Price,”  “Daily
VWAP,” “Daily Conversion Value” or “Daily Settlement Amount” (each as defined in
the Indenture).  For the avoidance of doubt, Dealer shall not have any delivery
or payment obligation hereunder, and no adjustment shall be made to the terms of
the Transaction, on account of (x) any distribution of cash, property or
securities by Counterparty to holders of the Convertible Notes (upon conversion
or otherwise) or (y) any other transaction in which holders of the Convertible
Notes are entitled to participate, in each case, in lieu of an adjustment under
the Indenture of the type referred to in the immediately preceding sentence
(including, without limitation, pursuant to [the fourth sentence of Section
14.04(c) of the Indenture]37 or [the fourth sentence of Section 14.04(d) of the
Indenture]38).

 

 

37 Include cross reference to provision in the Indenture providing for
pass-through of Distributed Property, at the same time as it is received by
holders of the Shares, in lieu of a Conversion Rate adjustment.

38 Include cross reference to provision in the Indenture providing for
pass-through of cash, at the same time as it is received by holders of the
Shares, in lieu of a Conversion Rate adjustment.

 

 11 

 

 

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; provided that, notwithstanding the foregoing, if the Calculation
Agent acting in good faith and in a commercially reasonable manner disagrees
with any adjustment pursuant to the terms and provisions of the Indenture that
is the basis of any calculation hereunder and that involves an exercise of
discretion by Counterparty or its board of directors (including, without
limitation, pursuant to Section [14.05]39 of the Indenture, Section [14.07]40 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
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. Dilution Adjustment Provisions: Sections
[14.04(a), (b), (b), (b) and (e)]41 and Section [14.05]42 of the Indenture.
Extraordinary Events applicable to the Transaction: Merger Events: Applicable;
provided that notwithstanding Section 12.1(b) of the Equity Definitions, a
“Merger Event” means the occurrence of any event or condition set forth in the
definition of “Merger Event” in Section [14.07(a)]43 of the Indenture. Tender
Offers: Applicable; provided that notwithstanding Section 12.1(d) of the Equity
Definitions, a “Tender Offer” means the occurrence of any event or condition set
forth in Section [14.04(e)]44 of the Indenture.

 

 

39 Include cross-reference to specific paragraph of the section of the Indenture
providing for adjustments where a Conversion Rate adjustment occurs during a
period over which VWAP, conversion value, settlement amount or closing price is
calculated.

40 Include cross-reference to Indenture section relating to merger events.

41 Include cross-reference to specific paragraphs of the section of the
Indenture containing anti-dilution adjustments to the Conversion Rate.

42 Include cross-reference to specific paragraph of the section of the Indenture
providing for adjustments where a Conversion Rate adjustment occurs during a
period over which VWAP, conversion value, settlement amount or closing price is
calculated.

43 Include cross-reference to the section of the Indenture describing
consequences of merger events.

44 Include cross-reference to the section of the Indenture describing
consequences of tender offers.

 

 12 

 

 

Consequences of Merger Events / Tender Offers: Notwithstanding Section 12.2 and
Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or
a Tender Offer, the Calculation Agent shall make a corresponding adjustment in
respect of any adjustment under the Indenture to any one or more of the nature
of the Shares (in the case of a Merger Event), Strike Price, Number of Options,
Option Entitlement and any other variable relevant to the exercise, settlement
or payment for the Transaction; provided, however, that such adjustment shall be
made without regard to any adjustment to the Conversion Rate determined pursuant
to any Excluded Provision; provided further that if, with respect to a Merger
Event or a Tender Offer, (i) the consideration for the Shares includes (or, at
the option of a holder of Shares, may include) shares of an entity or person
that is not a corporation or is not organized under the laws of the United
States, any State thereof or the District of Columbia or (ii) the Counterparty
to the Transaction following such Merger Event or Tender Offer, will not be a
corporation or will not be the Issuer following such Merger Event or Tender
Offer, then Cancellation and Payment (Calculation Agent Determination) may apply
at Dealer’s sole election. Nationalization, Insolvency or Delisting:
Cancellation and Payment (Calculation Agent Determination); provided that, in
addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it
will also constitute a Delisting if the Exchange is located in the United States
and the Shares are not immediately re-listed, re-traded or re-quoted on any of
the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ
Global Market (or their respective successors); if the Shares are immediately
re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The
NASDAQ Global Select Market or The NASDAQ Global Market (or their respective
successors), such exchange or quotation system shall thereafter be deemed to be
the Exchange. Additional Disruption Events:   Change in Law: Applicable;
provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by
(i) replacing the word “Shares” with the phrase “Hedge Positions” in clause (X)
thereof, (ii) inserting the parenthetical “(including, for the avoidance of
doubt and without limitation, adoption or promulgation of new regulations
authorized or mandated by existing statute)” at the end of clause (A) thereof
and (iii) immediately following the word “Transaction” in clause (X) thereof,
adding the phrase “in the manner contemplated by the Hedging Party on the Trade
Date”.

 

 13 

 

 

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: Not Applicable Hedging Party:
For all applicable Additional Disruption Events, Dealer. Determining Party: For
all applicable Extraordinary Events, Dealer.  All calculations and
determinations by the Determining Party shall be made in good faith and in a
commercially reasonable manner.  Following any calculation by the Determining
Party hereunder, upon written request by Counterparty, the Determining Party
will provide to Counterparty by email to the email address provided to
Counterparty in such written request a report (in a commonly used file format
for the storage and manipulation of financial data) displaying in reasonable
detail the basis for such calculation; provided, however, that in no event will
the Determining Party be obligated to share with Counterparty any proprietary or
confidential data or information or information or any proprietary or
confidential models used by it. Non-Reliance: Applicable. Agreements and
Acknowledgments Regarding Hedging Activities: Applicable Additional
Acknowledgments: Applicable

 

 14 

 

 

4.           Calculation Agent. Dealer; provided that following the occurrence
and during the continuance of an Event of Default of the type described in
Section 5(a)(vii) of the Agreement with respect to which Dealer is the sole
Defaulting Party, if the Calculation Agent fails to timely make any calculation,
adjustment or determination required to be made by the Calculation Agent
hereunder or to perform any obligation of the Calculation Agent hereunder and
such failure continues for five Exchange Business Days following notice to the
Calculation Agent by Counterparty of such failure, Counterparty shall have the
right to designate a nationally recognized third-party dealer in
over-the-counter corporate equity derivatives to act, during the period
commencing on the first date the Calculation Agent fails to timely make such
calculation, adjustment or determination or to perform such obligation, as the
case may be, and ending on the earlier of the Early Termination Date with
respect to such Event of Default and the date on which such Event of Default is
no longer continuing, as the Calculation Agent.   All calculations and
determinations by the Calculation Agent shall be made in good faith and in a
commercially reasonable manner.  Following any calculation by the Calculation
Agent hereunder, upon written request by Counterparty, the Calculation Agent
will provide to Counterparty by email to the email address provided by
Counterparty in such written request a report (in a commonly used file format
for the storage and manipulation of financial data) displaying in reasonable
detail the basis for such calculation; provided, however, that in no event will
Dealer be obligated to share with Counterparty any proprietary or confidential
data or information or any proprietary or confidential models used by it.

 

5.Account Details.

 

(a)Account for payments to Counterparty:

 

[Bank:Wells Fargo Bank, N.A.

ABA#:[        ]

Acct No.:[        ]

Beneficiary:[        ]

Ref:SWIFT: [        ]45

 

Account for delivery of Shares to Counterparty:

 

To be provided upon request.

 

(b)Account for payments to Dealer:

 

[Bank: Barclays Bank plc NY

ABA#  [        ]

BIC: [        ]

Acct: [        ]

Beneficiary: [        ]46

 

 

45 Company’s counsel to confirm.

46 Include for Barclays.

 

 15 

 

 

[Chase Manhattan Bank New York

For A/C Goldman Sachs & Co. LLC

A/C # [        ]

ABA: [        ]47

 

Account for delivery of Shares from Dealer:

 

To be provided by Dealer.

 

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: [Inapplicable, Dealer is not a
Multibranch Party]48 [200 West Street, New York, New York 10282-2198]49

 

7.Notices.

 

(a)Address for notices or communications to Counterparty:

 

[Enphase Energy, Inc.

Attention: General Counsel

Telephone No.: (707) 763-4785]50

 

(b)Address for notices or communications to Dealer:

 

[Barclays Bank PLC

c/o Barclays Capital Inc.

745 Seventh Avenue

New York, NY 10019

Attn:S. Raj Imteaz

Telephone:(+1) 212-526-1426

Facsimile:(+1) 917-522-0458

Email:syed.imteaz@barclays.com]51

 

[To:Goldman Sachs & Co. LLC

200 West Street

New York, NY 10282-2198

Attn:Michael Voris,

Equity Capital Markets

Telephone:212-902-4895

Facsimile:212-291-5027

Email:michael.voris@gs.com

 

And email notification to the following address:

Eq-derivs-notifications@am.ibd.gs.com]52

 

 

47 Include for GS.

48 Include for Barclays.

49 Include for GS.

50 Company’s counsel to confirm.

51 Include for Barclays.

52 Include for GS.

 

 16 

 

 

8.Representations and Warranties of Counterparty.

 

(a)Representations and Warranties of Counterparty. Each of the representations
and warranties of Counterparty set forth in Section 2 of the Purchase Agreement
(the “Purchase Agreement”), dated as of [________], 2020, among Counterparty and
Barclays Capital Inc. and Goldman Sachs & Co. LLC, as representatives of the
initial purchasers party thereto (the “Initial Purchasers”), are true and
correct and are hereby deemed to be repeated to Dealer as if set forth herein.
Counterparty hereby further represents and warrants to Dealer on the date hereof
and on and as of the Premium Payment Date that:

 

(i)Counterparty has all necessary corporate power and authority to execute,
deliver and perform its obligations in respect of the Transaction; such
execution, delivery and performance have been duly authorized by all necessary
corporate action on Counterparty’s part; and this Confirmation has been duly and
validly executed and delivered by Counterparty and constitutes its valid and
binding obligation, enforceable against Counterparty in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity) and except that rights to indemnification and contribution hereunder
may be limited by federal or state securities laws or public policy relating
thereto.

 

(ii)Neither the execution and delivery of this Confirmation nor the incurrence
or performance of obligations of Counterparty hereunder will conflict with or
result in a breach of (A) the certificate of incorporation or by-laws (or any
equivalent documents) of Counterparty, or (B) any applicable law or regulation,
or any order, writ, injunction or decree of any court or governmental authority
or agency, or (C) any agreement or instrument to which Counterparty or any of
its subsidiaries is a party or by which Counterparty or any of its subsidiaries
is bound or to which Counterparty or any of its subsidiaries is subject, or
constitute a default under, or result in the creation of any lien under, any
such agreement or instrument, except for any such conflicts, breaches, defaults
or lien creations in the cases of clause (C) above that would not adversely
affect the ability of Counterparty to fulfill its obligations under this
Transaction.

 

(iii)No consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required in connection with the
execution, delivery or performance by Counterparty of this Confirmation, except
such as have been obtained or made and such as may be required under the
Securities Act or state securities laws.

 

(iv)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.

 

(v)Counterparty is in compliance, in all material respects, with its periodic
reporting obligations under the Exchange Act.

 

(vi)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 $50 million.

 

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

 

 17 

 

 

9.Other Provisions.

 

(a)Opinions. Counterparty shall deliver to Dealer an opinion of counsel, dated
as of the Trade Date, with respect to (i) the matters set forth in Section
8(a)(ii)(B) and Section 8(a)(iii) of this Confirmation to the knowledge of
counsel, (ii) due incorporation, existence and good standing of Counterparty in
Delaware, (iii) the due authorization, execution and delivery of this
Confirmation, and, (iv) in respect of the execution, delivery and performance of
this Confirmation, the absence of any conflict with or breach of any material
agreement required to be filed as an exhibit to Counterparty’s Annual Report on
Form 10-K, Counterparty’s certificate of incorporation or Counterparty’s
by-laws.  Delivery of such opinion to Dealer shall be a condition precedent for
the purpose of Section 2(a)(iii) of the Agreement with respect to each
obligation of Dealer under Section 2(a)(i) of the Agreement.

 

(b)Repurchase Notices. Counterparty shall, on any day on which Counterparty
effects any repurchase of Shares, promptly give Dealer a written notice of such
repurchase (a “Repurchase Notice”) on such day if following such repurchase, the
number of outstanding Shares as determined on such day is (i) less than [__]53
million (in the case of the first such notice) or (ii) thereafter more than
[__]54 million less than the number of Shares 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 hedging activities or cessation of hedging activities and any losses in
connection therewith with respect to the Transaction), claims, damages,
judgments, liabilities and expenses (including reasonable attorney’s fees),
joint or several, which an Indemnified Person may become subject to, as a result
of Counterparty’s failure to provide Dealer with a Repurchase Notice on the day
and in the manner specified in this paragraph, and to reimburse, within 30 days,
upon written request, each of such Indemnified Persons for any reasonable legal
or other 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 counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person and any others
Counterparty may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. Counterparty shall 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 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 (b) are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any Indemnified Person at law or in equity. The
indemnity and contribution agreements contained in this paragraph shall remain
operative and in full force and effect regardless of the termination of the
Transaction.

 

 

53 Insert the number of Shares outstanding that would cause Dealer’s current
position in the Shares underlying the Transaction (including the number of
Shares underlying any additional transaction if the greenshoe is exercised in
full, and any Shares under pre-existing call option transactions with
Counterparty) to increase by 0.5%, based on dealer with highest Applicable
Percentage.

54 Insert the number of Shares that, if repurchased, would cause Dealer’s
current position in the Shares underlying the Transaction (including the number
of Shares underlying any additional transaction if the greenshoe is exercised in
full, and any Shares under pre-existing call option transactions with
Counterparty) to increase by a further 0.5% from the threshold for the first
Repurchase Notice, based on dealer with highest Applicable Percentage.

 

 18 

 

 

(c)Regulation M. Counterparty is not on the Trade Date engaged in a
distribution, as such term is used in Regulation M under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), of any securities of Counterparty,
other than a distribution meeting the requirements of the exception set forth in
Rules 101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall 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 manipulate the price of the Shares
(or any security convertible into or exchangeable for the Shares) 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(n) or 9(s) of this Confirmation;

 

(B)Any Transfer Options shall only be transferred or assigned to a third party
that is a United States person (as defined in the Internal Revenue Code of 1986,
as amended (the “Code”);

 

(C)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;

 

(D)Dealer will not, as a result of such transfer and assignment, be required to
pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the
Agreement greater than an amount that Dealer would have been required to pay to
Counterparty in the absence of such transfer and assignment;

 

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

 

(F)Without limiting the generality of clause (B), Counterparty shall 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 (D) and (E) will not occur upon or
after such transfer and assignment; and

 

 19 

 

 

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

 

(ii)Dealer may, without Counterparty’s consent, transfer or assign (such
transfer or assignment, a “Transfer”) 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 (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 Dealer Parent]55, or
(B) 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 third party, at least an equivalent rating or better by a
substitute rating agency mutually agreed by Counterparty and Dealer; provided
that either (x) the transferee in any such Transfer shall be a “dealer in
securities” within the meaning of Section 475(c)(1) of the Code or (y) the
Transfer will not result in a deemed exchange by Counterparty within the meaning
of Section 1001 of the Code; and provided further that Dealer shall provide
notice to Counterparty following any such Transfer. If at any time at which (A)
the Section 16 Percentage exceeds 8.0%, (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 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(l) 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, and (B) the denominator of which is the number of Shares
outstanding.

 

 

55 Include for GS.

 

 20 

 

 

The “Share Amount” as of any day is the number of Shares that Dealer and any
person whose ownership position would be aggregated with that of Dealer (Dealer
or any such person, a “Dealer Person”) under any law, rule, regulation,
regulatory order or organizational documents or contracts of Counterparty that
are, in each case, applicable to ownership of Shares (“Applicable
Restrictions”), owns, beneficially owns, constructively owns, controls, holds
the power to vote or otherwise meets a relevant definition of ownership under
any Applicable Restriction, as determined by Dealer in its reasonable
discretion. The “Applicable Share Limit” means a number of Shares equal to (A)
the minimum number of Shares that could give rise to reporting or registration
obligations or other requirements (including obtaining prior approval from any
person or entity) of a Dealer Person, or could result in an adverse effect on a
Dealer Person, under any Applicable Restriction, as determined by Dealer in its
reasonable discretion, minus (B) 1% of the number of Shares outstanding.

 

(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 (each, a “Dealer
Designated Affiliate”) 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 under this Confirmation to the extent such Dealer Designated
Affiliate fully performs the obligations designated by Dealer to such Dealer
Designated Affiliate under this Section 9(e)(iii).

 

(f)Staggered Settlement. If upon advice of counsel with respect to applicable
legal and regulatory requirements, including any requirements relating to
Dealer’s commercially reasonable hedging activities hereunder that would be
customarily applicable to transactions of this type by the dealers in this
market as determined by the Calculation Agent, 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 (the first of which will be such Nominal Settlement Date and
the last of which will be no later than the twentieth (20th) Exchange Business
Day following such Nominal Settlement Date) and the number of Shares that it
will deliver on each Staggered Settlement Date;

 

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

 

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

 

 21 

 

 

(g)[Role of Agent. Each of Dealer and Counterparty acknowledges to and agrees
with the other party hereto and to and with the Agent that (i) the Agent is
acting as agent for Dealer under the Transaction pursuant to instructions from
such party, (ii) the Agent is not a principal or party to the Transaction, and
may transfer its rights and obligations with respect to the Transaction, (iii)
the Agent shall have no responsibility, obligation or liability, by way of
issuance, guaranty, endorsement or otherwise in any manner with respect to the
performance of either party under the Transaction, (iv) Dealer and the Agent
have not given, and Counterparty is not relying (for purposes of making any
investment decision or otherwise) upon, any statements, opinions or
representations (whether written or oral) of Dealer or the Agent, other than the
representations expressly set forth in this Confirmation or the Agreement, and
(v) each party agrees to proceed solely against the other party, and not the
Agent, to collect or recover any money or securities owed to it in connection
with the Transaction. Each party hereto acknowledges and agrees that the Agent
is an intended third party beneficiary hereunder. Counterparty acknowledges that
the Agent is an affiliate of Dealer. Dealer will be acting for its own account
in respect of this Confirmation and the Transaction contemplated
hereunder.]56[Reserved.]57

 

(h)Submission to Jurisdiction. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ALL
MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND
ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

 

(i)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 Convertible
Notes as set forth in Section [6.01]58 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)Promptly (and in any event within five Scheduled Trading Days) following any
repurchase (which, for the avoidance of doubt, includes any exchange
transaction) and cancellation of Convertible Notes, including without limitation
pursuant to [Article 15] of the Indenture in connection with a “Fundamental
Change” (as defined in the Indenture) (such event, a “Repurchase Event”),
Counterparty may notify Dealer in writing of such Repurchase Event and the
number of Convertible Notes subject to such Repurchase Event (any such notice, a
“Repurchase Notice”). Notwithstanding anything to the contrary in this
Confirmation, the receipt by Dealer from Counterparty of (x) any Repurchase
Notice, within the applicable time period set forth in the preceding sentence,
and (y) a written representation and warranty by Counterparty that, as of the
date of such Repurchase Notice, Counterparty is not in possession of any
material non-public information regarding Counterparty or the Shares, shall
constitute an Additional Termination Event as provided in this paragraph. Upon
receipt of any such Repurchase Notice and the related written representation and
warranty, Dealer shall promptly designate an Exchange Business Day following
receipt of such Repurchase Notice (which Exchange Business Day shall be on or as
promptly as reasonably practicable after the related repurchase settlement date
for the relevant Repurchase Event) as an Early Termination Date with respect to
the portion of this Transaction corresponding to a number of Options (the
“Repurchase Options”) equal to the lesser of (A) the number of such Convertible
Notes specified in such Repurchase Notice [minus the number of “Repurchase
Options” (as defined in the Base Call Option Confirmation), if any, that relate
to such Convertible Notes]59 divided by the Applicable Percentage 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
Repurchase Options. Any payment hereunder with respect to such termination 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 this Transaction and a Number of Options equal to the number of
Repurchase Options, (2) Counterparty were the sole Affected Party with respect
to such Additional Termination Event, (3) no adjustment to the “Conversion Rate”
(as defined in the Indenture) for the Convertible Notes has occurred pursuant to
any Excluded Provision, (4) the corresponding Convertible Notes remaining
outstanding as if the circumstances related to the Repurchase Event had not
occurred, (5) the relevant Repurchase Event and any conversions, adjustments,
agreements, payments, deliveries or acquisitions by or on behalf of Counterparty
leading thereto had not occurred, and (6) the terminated portion of the
Transaction were the sole Affected Transaction.

 

 

56 Include for Barclays.

57 Include for GS.

58 Include cross-reference to Indenture section covering events of default.

59 Include for Additional Call Option Confirmation only.

 

 22 

 

 

(j)Amendments to Equity Definitions.

 

(i)Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1)
deleting from the fourth line thereof the word “or” after the word “official”
and inserting a comma therefor, and (2) deleting the semi-colon at the end of
subsection (B) thereof and inserting the following words therefor “or (C) the
occurrence of any of the events specified in Section 5(a)(vii)(1) through (9) of
the ISDA Master Agreement with respect to that Issuer.”

 

(ii)Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1)
replacing “either party may elect” with “Dealer may elect” and (2) replacing
“notice to the other party” with “notice to Counterparty” in the first sentence
of such section.

 

(k)No Setoff. 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.

 

(l)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 all holders of Shares consists solely of cash, (ii) a Merger Event or
Tender Offer that is within Counterparty’s control, or (iii) an Event of Default
in which Counterparty is the Defaulting Party or a Termination Event in which
Counterparty is the Affected Party other than an Event of Default of the type
described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a
Termination Event of the type described in Section 5(b) of the Agreement, in
each case that resulted from an event or events outside Counterparty’s control),
and if Dealer would owe any amount to Counterparty pursuant to Section 6(d)(ii)
of the Agreement or any Cancellation Amount pursuant to Article 12 of the Equity
Definitions (any such amount, a “Payment Obligation”), then Dealer shall satisfy
the Payment Obligation by the Share Termination Alternative (as defined below),
unless (a) Counterparty gives irrevocable telephonic notice to Dealer, confirmed
in writing within one Scheduled Trading Day, no later than 12:00 p.m. (New York
City time) on the Merger Date, Tender Offer Date, Announcement Date (in the case
of a Nationalization, Insolvency or Delisting), Early Termination Date or date
of cancellation, as applicable, of its election that the Share Termination
Alternative shall not apply, (b) Counterparty remakes the representation set
forth in Section 8(a)(v) as of the date of such election and (c) Dealer agrees,
in its sole discretion, to 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.

 

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.

 

 23 

 

 

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 good
faith and in a commercially reasonable manner 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: One Share or, if the Shares have changed into
cash or any other property or the right to receive cash or any other property as
the result of a Nationalization, Insolvency or Merger Event (any such cash or
other property, the “Exchange Property”), a unit consisting of the type and
amount of such Exchange Property received by a holder of one Share (without
consideration of any requirement to pay cash or other consideration in lieu of
fractional amounts of any securities) in such Nationalization, Insolvency or
Merger Event, as determined by the Calculation Agent.

 

Failure to Deliver: Applicable

 

Other applicable provisions: If Share Termination Alternative is applicable, the
provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity
Definitions and the provisions set forth opposite the caption “Representation
and Agreement” in Section 2 will be applicable, except that all references in
such provisions to “Physically-settled” shall be read as references to “Share
Termination Settled” and all references to “Shares” shall be read as references
to “Share Termination Delivery Units”. “Share Termination Settled” in relation
to the Transaction means that the Share Termination Alternative is applicable to
the Transaction.

 

 24 

 

 

(m)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.

 

(n)Registration. Counterparty hereby agrees that if, in the good faith
reasonable judgment of Dealer, based on the advice of counsel, the Shares
(“Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations
pursuant to the Transaction cannot be sold in the public market by Dealer
without registration under the Securities Act, Counterparty shall, at its
election, either (i) in order to allow Dealer to sell the Hedge Shares in a
registered offering, make available to Dealer an effective registration
statement under the Securities Act and enter into an agreement, in customary
form and substance reasonably satisfactory to Dealer, substantially in the form
of an underwriting agreement for a registered secondary offering of equity
securities of comparable size of companies of comparable size, maturity and line
of business; 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 comparable
size of companies of comparable size, maturity and line of business, in
customary form and substance that is commercially reasonable and reasonably
satisfactory to Dealer (in which case, the Calculation Agent shall make any
adjustments to the terms of the Transaction that are necessary, in its
commercially reasonable judgment, to compensate Dealer for any discount from the
public market price of the Shares incurred on the sale of Hedge Shares in a
private placement), or (iii) purchase the Hedge Shares from Dealer at the
Relevant Price on such Exchange Business Days, and in the amounts, requested by
Dealer.

 

(o)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.

 

(p)Right to Extend. Dealer may postpone or add, in a commercially reasonable
manner, in whole or in part, any Valid Day or Valid Days during the Settlement
Averaging Period or any other date of valuation, payment or delivery by Dealer,
with respect to some or all of the Options hereunder, if Dealer reasonably
determines, in its reasonable discretion, that such action is reasonably
necessary or appropriate to preserve Dealer’s commercially reasonable hedging or
hedge unwind activity hereunder in light of existing liquidity conditions or 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 with applicable legal, regulatory or
self-regulatory requirements, or with related policies and procedures applicable
to Dealer; provided that in no event shall Dealer have the right to so postpone
or add any Valid Day(s) or any such other date beyond the 30th Valid Day
immediately following the last Valid Day of the relevant Settlement Averaging
Period (determined without regard to this Section 9(p)).

 

 25 

 

 

(q)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.

 

(r)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.

 

(s)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 the weighted
average of 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;

 

(ii)promptly following any adjustment to the Convertible Notes in connection
with any Potential Adjustment Event, Merger Event or Tender Offer, Counterparty
shall give Dealer written notice of the details of such adjustment; and

 

(iii)on the date Counterparty satisfies the “[Share Reservation Condition]” (as
defined in the Indenture), Counterparty shall give Dealer written notice that
such condition has been satisfied.

 

(t)Wall Street Transparency and Accountability Act. In connection with Section
739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”),
the parties hereby agree that neither the enactment of WSTAA or any regulation
under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA,
shall limit or otherwise impair either party’s otherwise applicable rights to
terminate, renegotiate, modify, amend or supplement this Confirmation or the
Agreement, as applicable, arising from a termination event, force majeure,
illegality, increased costs, regulatory change or similar event under this
Confirmation, the Equity Definitions incorporated herein, or the Agreement
(including, but not limited to, rights arising from Change in Law, Hedging
Disruption, Increased Cost of Hedging, an Excess Ownership Position, or
Illegality (as defined in the Agreement)).

 

(u)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.

 

 26 

 

 

(v)Early Unwind. In the event the sale of the [“Underwritten
Securities”]60[“Option Securities”]61 (as defined in the Purchase Agreement) is
not consummated with the Initial Purchasers for any reason, or Counterparty
fails to deliver to Dealer opinions of counsel as required pursuant to Section
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; 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.

 

(w)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.

 

(x)Determinations; Adjustments. All calculations, adjustments and determinations
made by Dealer hereunder, whether as Calculation Agent, as Determining Party or
following the occurrence of an Early Termination Date, shall be made in good
faith and in a commercially reasonable manner. Following any determination,
adjustment or calculation by Dealer hereunder (including, without limitation, in
its capacity as Calculation Agent), Dealer will provide to Counterparty by email
to the email address provided by Counterparty in such written request a report
(in a commonly used file format for the storage and manipulation of financial
data) displaying in reasonable detail the basis for such calculation; provided,
however, that in no event will Dealer be obligated to share with Counterparty
any proprietary or confidential data or information or any proprietary or
confidential models used by it. For the avoidance of doubt, whenever the
Calculation Agent or Determining Party (as the case may be) is called upon to
make an adjustment pursuant to the terms of this Confirmation or the Equity
Definitions (other than any adjustment required to be made by reference to the
terms of the Convertible Notes or the Indenture) to take into account the effect
of an event, the Calculation Agent or Determining Party (as the case may be)
shall make such adjustment by reference to the effect of such event on the
Hedging Party, assuming that the Hedging Party maintains a commercially
reasonable hedge position.

 

(y)Tax Matters.

 

(i)Payee Representations:

 

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

 

Counterparty is a corporation and a U.S. person (as that term is defined in
Section 7701(a)(30) of the Code and used in Section 1.1441-4(a)(3)(ii) of the
United States Treasury Regulations) for U.S. federal income tax purposes.

 

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

 

[(A) It 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

 

 

60 Insert for Base Call Option Confirmation.

61 Insert for Additional Call Option Confirmation.

 

 27 

 

 

(B) Each payment received or to be received by it in connection with this
Agreement will be effectively connected with its conduct of a trade or business
in the United States.]62

 

[(A) Dealer is a U.S. person (as that term is defined in Section 7701(a)(30) of
the Code and used in Section 1.1441-4(a)(3)(ii) of the United States Treasury
Regulations) for U.S. federal income tax purposes.]63

 

(ii)Tax Documentation. For the purposes of Section 4(a)(i) of the Agreement, (1)
Counterparty shall provide to Dealer a valid United States Internal Revenue
Service Form W-9 (or successor thereto), and (2) Dealer shall provide to
Counterparty a valid United States Internal Revenue Service Form
[W-8ECI]64[W-9]65 (or successor thereto), in each case, (A) on or before the
date of execution of this Confirmation and (B) promptly upon learning that any
such tax form previously provided by it has become obsolete or incorrect.

 

(iii)Withholding Tax Imposed on Payments to non-U.S. Counterparties under the
Provisions Known as the Foreign Account Tax Compliance Act. “Indemnifiable Tax”
as defined in Section 14 of the Agreement shall not include any U.S. federal
withholding tax imposed or collected pursuant to Sections 1471 through 1474 of
the Code, any current or future regulations or official interpretations thereof,
any agreement entered into pursuant to Section 1471(b) of the Code, or any
fiscal or regulatory legislation, rules or practices adopted pursuant to any
intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code (a “FATCA Withholding Tax”). For the avoidance of
doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is
required by applicable law for the purposes of Section 2(d) of the Agreement.

 

(iv)HIRE Act. “Indemnifiable Tax”, as defined in Section 14 of the Agreement,
shall not include any tax imposed on payments treated as dividends from sources
within the United States under Section 871(m) of the Code or any regulations
issued thereunder.

 

(z)[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.

 

(aa)Risk Disclosure Statement. Counterparty represents and warrants that it has
received, read and understands the OTC Options Risk Disclosure Statement
provided by Dealer and a copy of the most recent disclosure pamphlet prepared by
The Options Clearing Corporation entitled “Characteristics and Risks of
Standardized Options”.

 

(bb)U.S. Resolution Stay Provisions.

 

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

 

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

 

 

62 Include for Barclays.

63 Include for GS.

64 Include for Barclays.

65 Include for GS.

 

 28 

 

 

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

 

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

 

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

 

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

 

(iii)U.S. Protocol. If Counterparty has previously adhered to, or subsequently
adheres to, the ISDA 2018 U.S. Resolution Stay Protocol as published by the
International Swaps and Derivatives Association, Inc. as of July 31, 2018 (the
“ISDA U.S. Protocol”), the terms of such protocol shall be incorporated into and
form a part of this Confirmation and the terms of the ISDA U.S. Protocol shall
supersede and replace the terms of this Section 9(dd). For purposes of
incorporating the ISDA U.S. Protocol, GS&Co. shall be deemed to be a Regulated
Entity, Counterparty shall be deemed to be an Adhering Party, and this
Confirmation shall be deemed to be a Protocol Covered Agreement. Capitalized
terms used but not defined in this paragraph shall have the meanings given to
them in the ISDA U.S. Protocol.

 

(iv)Preexisting In-Scope Agreements. GS&Co. and Counterparty agree that to the
extent there are any outstanding “in-scope QFCs,” as defined in 12 C.F.R. §
252.82(d), that are not excluded under 12 C.F.R. § 252.88, between GS&Co. and
Counterparty that do not otherwise comply with the requirements of 12 C.F.R. §
252.2, 252.81–8 (each such agreement, a “Preexisting In-Scope Agreement”), then
each such Preexisting In-Scope Agreement is hereby amended to include the
foregoing provisions in this Section 9(dd), with references to “this
Confirmation” being understood to be references to the applicable Preexisting
In-Scope Agreement.

 

For the purposes of this Section 9(bb), “Affiliate” is defined in, and shall be
interpreted in accordance with, 12 U.S.C. § 1841(k), and “Credit Enhancement”
means any credit enhancement or credit support arrangement in support of the
obligations of GS&Co. under or with respect to this Confirmation, including any
guarantee, collateral arrangement (including any pledge, charge, mortgage or
other security interest in collateral or title transfer arrangement), trust or
similar arrangement, letter of credit, transfer of margin or any similar
arrangement.]66

 

 

66 Include for GS.

 

 29 

 

 

(cc)[Regulatory Provisions. The time of dealing for the Transaction will be
confirmed by Dealer upon written request by Counterparty. The Agent will furnish
to Counterparty 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 a
Transaction.

 

(dd)Method of Delivery. Whenever delivery of funds or other assets is required
hereunder by or to Counterparty, such delivery shall be effected through the
Agent. In addition, all notices, demands and communications of any kind relating
to the Transaction between Dealer and Counterparty shall be transmitted
exclusively through the Agent.

 

(ee)[2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure
Protocol. The parties agree that the terms of the 2013 EMIR Portfolio
Reconciliation, Dispute Resolution and Disclosure Protocol published by ISDA on
July 19, 2013 (“Protocol”) apply to the Agreement as if the parties had adhered
to the Protocol without amendment. In respect of the Attachment to the Protocol,
(i) the definition of “Adherence Letter” shall be deemed to be deleted and
references to “Adherence Letter” shall be deemed to be to this section (and
references to “such party’s Adherence Letter” and “its Adherence Letter” shall
be read accordingly), (ii) references to “adheres to the Protocol” shall be
deemed to be “enters into the Agreement”, (iii) references to “Protocol Covered
Agreement” shall be deemed to be references to the Agreement (and each “Protocol
Covered Agreement” shall be read accordingly), and (iv) references to
“Implementation Date” shall be deemed to be references to the date of this
Confirmation. For the purposes of this section:

 

1.Dealer is a Portfolio Data Sending Entity and Counterparty is a Portfolio Data
Receiving Entity;

 

2.Dealer and Counterparty may use a Third Party Service Provider, and each of
Dealer and Counterparty consents to such use including the communication of the
relevant data in relation to Dealer and Counterparty to such Third Party Service
Provider for the purposes of the reconciliation services provided by such
entity.

 

3.The Local Business Days for such purposes in relation to Dealer and
Counterparty is New York, New York, USA.

 

4.The following are the applicable email addresses.

 

Portfolio Data:Dealer: MarginServicesPortRec@barclays.com

 

Counterparty: [lhung@enphase.com]67

 

Notice of discrepancy:Dealer: PortRecDiscrepancy@barclays.com

 

Counterparty: [lhung@enphase.com]

 

Dispute Notice:Dealer: EMIRdisputenotices@barclays.com

 

Counterparty: [lhung@enphase.com]]68

 

(ff)NFC Representation Protocol. The parties agree that the provisions set out
in the Attachment to the ISDA 2013 EMIR NFC Representation Protocol published by
ISDA on March 8, 2013 (the “NFC Representation Protocol”) shall apply to the
Agreement as if each party were an Adhering Party under the terms of the NFC
Representation Protocol. In respect of the Attachment to the NFC Representation
Protocol, (i) the definition of “Adherence Letter” shall be deemed to be deleted
and references to “Adherence Letter” shall be deemed to be to this section (and
references to “the relevant Adherence Letter” and “its Adherence Letter” shall
be read accordingly), (ii) references to “adheres to the Protocol” shall be
deemed to be “enters into the Agreement”, (iii) references to “Covered Master
Agreement” shall be deemed to be references to the Agreement (and each “Covered
Master Agreement” shall be read accordingly), and (iv) references to
“Implementation Date” shall be deemed to be references to the date of this
Confirmation. Counterparty confirms that it enters into this Confirmation as a
party making the NFC Representation (as such term is defined in the NFC
Representation Protocol). Counterparty shall promptly notify Dealer of any
change to its status as a party making the NFC Representation.

 

 

67 Company’s counsel to confirm.

68 Include for Barclays.

 

 30 

 

 

(gg)Acknowledgment regarding certain UK Resolution Authority Powers.

 

(i)Dealer is authorized by the Prudential Regulation Authority (“PRA”) and
regulated by the Financial Conduct Authority and the PRA, and is subject to the
Bank of England’s resolution authority powers, as contained in the EU Bank
Recovery and Resolution Directive, and transposed in the UK by the Banking Act
2009. The powers include the ability to (a) suspend temporarily the termination
and security enforcement rights of parties to a qualifying contract, and/or (b)
bail-in certain liabilities owed by Dealer including the writing-down of the
value of certain liabilities and/or the conversion of such liabilities into
equity holdings (as described in further detail below). Pursuant to PRA
requirements, Dealer is required to ensure that counterparties to certain
agreements it enters into which are governed by non-EEA law contractually
recognize the validity and applicability of the above-mentioned resolution
powers, in order to ensure their effectiveness in cross border scenarios.

 

(ii)The terms of this section apply only to the Transaction and constitute our
entire agreement in relation to the matters contained in this section, and do
not extend or amend the resolution authority powers of the Bank of England or
any replacement authority. The terms of this section may not be amended by any
other agreements, arrangements or understandings between Dealer and
Counterparty. By signing the Transaction, Counterparty acknowledges and agrees
that, notwithstanding the governing law of the Transaction, the Transaction is
subject to, and Counterparty will be bound by the effect of an application of,
the Bank of England’s (or replacement resolution authority’s) powers to (a) stay
termination and/or security enforcement rights, and (b) bail-in liabilities.]69

 

 

69 Include for Barclays.

 

 31 

 

 

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,                 [BARCLAYS BANK PLC                 By:
                           Name:     Title: Authorised Signatory]70          
[GOLDMAN SACHS & CO. LLC                 By:     Authorized Signatory    
Name:]71

 

 

Accepted and confirmed
as of the Trade Date:       Enphase Energy, Inc.           By:
                           Authorized Signatory   Name:  

 

 

70 Include for Barclays.

71 Include for GS.