Exhibit 10.1
 
LEGEND: **** denotes information omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment.
 
PURCHASE AGREEMENT
 
PURCHASE AGREEMENT, dated as of November 15, 2007 (the “Agreement”), by and
between MAXIMUS, Inc. (the “Issuer”), and UBS AG, London Branch (“UBS”) acting
through UBS Securities LLC (“Agent”) as agent.
 
WITNESSETH
 
WHEREAS, the Issuer has publicly announced its intention to repurchase shares of
its common stock, no par value per share (the “Common Stock”), from time to time
(the “Repurchase Program”); and
 
WHEREAS, the Issuer desires to enter into the Agreement with UBS in order to
effect the Repurchase Program;
 
NOW, THEREFORE, in consideration of the premises, the covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
 
Section 1. Definitions.
 
As used herein the following terms shall have the meanings set forth below:
 
“Announcement Date” means in respect of a Merger Event, the date of the first
public announcement of a firm intention to merge or to make an offer that leads
to the Merger Event, as determined by the Calculation Agent.
 
“Bankruptcy” means the Issuer is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability generally to pay its
debts as they become due; (3) makes a general assignment, arrangement or
composition with or for the benefit of its creditors; (4) institutes or has
instituted against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency law or other
similar law affecting creditors' rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A) results in a
judgment of insolvency or bankruptcy or the entry of an order for relief

 
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or the making of an order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each case within 30 days of the
institution or presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes subject to the
appointment of an administrator, provisional liquidator, conservator, receiver,
trustee, custodian or other similar official for it or for all or substantially
all its assets; (7) has a secured party take possession of all or substantially
all its assets or has a distress, execution, attachment, sequestration or other
legal process levied, enforced or sued on or against all or substantially all
its assets and such secured party maintains possession, or any such process is
not dismissed, discharged, stayed or restrained, in each case within 30 days
thereafter; (8) causes or is subject to any event with respect to it which,
under the applicable laws of any jurisdiction, has an analogous effect to any of
the events specified in clauses (1) to (7) (inclusive); or (9) takes any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the foregoing acts.
 
“Bloomberg Screen Volume at Price Page” shall mean the display designated as
page “MMS Equity AQR” on the Bloomberg Financial Service or such page as may
replace the Volume at Price page on that service for the purpose of displaying
daily volume and volume-weighted trading prices of equity securities during the
normal trading hours of 9:30 a.m. to 4:00 p.m., New York Time or, if such
service does not then publish daily volume and volume-weighted trading prices of
the Common Stock, such other page and services selected by the Calculation Agent
that reports daily volume and weighted trading prices of the Common Stock.
 
“Borrowed Shares” means, as of any date, the number of Shares borrowed by UBS in
connection with this Transaction, as determined by the Calculation Agent.
 
“Calculation Agent” shall mean UBS Securities LLC. The Calculation Agent shall
make all calculations and determinations under this Agreement in good faith and
in a commercially reasonable manner.
 
“Calculation Date” means, with respect to each Tranche, the first Trading Day
after the Last Averaging Date.
 
“Closing Price” of the Common Stock on any day shall mean the last reported
sales price regular way on such day or, in case no such sales price is reported
on such day, the average of the reported closing bid and asked prices regular
way of the Common Stock, in each case on the Exchange, or, if not then traded on
the Exchange, the principal securities exchange or quotation system on which the
Common Stock is then listed or admitted to trading, or, if not then listed or
admitted to trading on a securities exchange or quotation system, the average of
the closing bid and asked prices of the Common Stock in the over-the-counter
market on the day in question as reported by the National Quotations Bureau
Incorporated, or a similarly generally accepted reporting service, or, if not so
available in such manner, as furnished by any New York Stock Exchange member
firm selected by the Calculation Agent.
 
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“Combined Consideration” means New Shares in combination with Other
Consideration.
 
“Cross Default” means the occurrence or existence of (1) a default, event of
default or other similar condition or event (however described) in respect of
the Issuer under one or more agreements or instruments relating to the repayment
of borrowed money in an aggregate amount of not less than $25 million which has
resulted in such agreement or instrument becoming due and payable before it
would otherwise have been due and payable (after giving effect to any applicable
notice requirement or grace period) or (2) a default by the Is suer in making
one or more payments on the due date thereof in an aggregate amount of not less
than $25 million under such agreements or instruments (after giving effect to
any applicable notice requirement or grace period).
 
“Determined Amount” has the meaning ascribed to it in Section 3(d).
 
“Discount” means the product of (a) ****, and (b) the arithmetic average of
daily volume-weighted average prices of Shares on each Trading Day from the
First Averaging Date up to and including the Last Averaging Date, as listed on
Bloomberg Screen Volume at Price Page.
 
“Dividend Event” means the payment of, or the public announcement or
notification to UBS pursuant to Section 6 below of, an ordinary or extraordinary
dividend or distribution by the Issuer with a record date occurring in any of
the time periods specified below with a value, as determined by the Calculation
Agent in good faith, that exceeds the amount specified below for such period by
$0.01 or more
 
Period
   
Dividend
November 16, 2007 through and including February 29, 2008
 
$0.10
March 1, 2008 through and including May 31, 2008
 
$0.10
June 1, 2008 through and including the Latest Completion Date
 
$0.10

 
“Early Closure” means the closure on any Trading Day of the Exchange or any
Related Exchange(s) prior to its regularly scheduled closing time.
 
“Excess Shares” means the number of Shares (if any) equal to (a)(i) the
Settlement Amount divided by (ii) the Reference Price minus (b) the Determined
Amount.
 
“Exchange” means the New York Stock Exchange or any successor thereto or any
substitute exchange or quotation system to which trading in the Shares has
temporarily relocated (provided that the Calculation Agent has determined that
there is comparable liquidity relative to the Shares on such temporary
substitute exchange or quotation system as on the original Exchange).

 
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“Exchange Disruption” means any event (other than an Early Closure) that
disrupts or impairs (as determined by the Calculation Agent) the ability of
market participants in general (i) to effect transactions in, or obtain market
values for, the Shares on the Exchange, or (ii) to effect transactions in, or
obtain market values for, futures or options contracts relating to the Shares on
the Related Exchange(s).
 
“Execution Period” shall mean the period commencing on the First Averaging Date
and ending on the earliest of (i) the Last Averaging Date of the last Tranche,
(ii) the Termination Date or (iii) the Termination Event Termination Date.
 
“Failure to Pay or Deliver” means failure by the Issuer to make, when due, any
payment under this Agreement or any delivery of Shares under this Agreement
required to be made by it if such failure is not remedied on or before the third
Trading Day after notice of such failure is given to the Is suer by UBS or the
Agent.
 
“Final VWAP-Minus Price” means, in respect of each Tranche, (i) the arithmetic
average of daily volume-weighted average prices of Shares for each Trading Day
from the First Averaging Date up to and including the Last Averaging Date for
that Tranche, as listed on Bloomberg Screen Volume at Price Page, minus (ii) the
Discount.
 
“First Averaging Date” means November 15, 2007; provided, however, that the
First Averaging Date may be extended by the Calculation Agent in its discretion
by one Trading Day for each Scheduled Trading Day following the date hereof and
prior to the First Averaging Date that ceases to be a Scheduled Trading Day or
is not a Trading Day due to the occurrence of a Market Disruption Event.
 
“Hedge Account Shares” means, as of any date, the Number of Shares minus the
Borrowed Shares.
 
“Last Averaging Date” means a Trading Day determined by UBS that is no later
than the Latest Completion Date and no earlier than:
 
- * * * * in the case of Tranche One
- **** in the case of Tranche Two
- **** in the case of Tranche Three
- **** in the case of Tranche Four
- **** in the case of Tranche Five
- **** in the case of Tranche Six
- **** in the case of Tranche Seven;
 
provided, however, that each of such dates (including the Latest Completion
Date) may be extended by the Calculation Agent in its discretion by one Trading
Day for each Scheduled Trading Day during the Execution Period that ceases to be
a Scheduled Trading Day or is not a Trading Day due to the occurrence of a
Market Disruption Event. Notice of the Last Averaging

 
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Date for any Tranche shall be given by UBS not later than 8:00 pm New York time
on the Trading Day following the Last Averaging Date. Notice shall be
irrevocable once provided to Issuer. If no notice is provided, then the Last
Averaging Date shall be the Latest Completion Date.
 
“Latest Completion Date” shall be * * * *
 
“Market Disruption Event” means the occurrence or existence of (i) a Trading
Disruption, (ii) an Exchange Disruption or (iii) an Early Closure, which in each
case the Calculation Agent determines is material.
 
“Merger Event” means, in respect of any relevant Shares, any (i)
reclassification or change of such Shares that results in a transfer of or an
irrevocable commitment to transfer all of such Shares outstanding, (ii)
consolidation, amalgamation or merger of the Issuer with or into another entity
(other than a consolidation, amalgamation or merger in which such Is suer is the
continuing entity and which does not result in any such reclassification or
change of all of such Shares outstanding) or (iii) other takeover offer for such
Shares that results in a transfer or an irrevocable commitment to transfer all
such Shares (other than such Shares owned or controlled by the offeror), in each
case if the Merger Date is on or before the Last Averaging Date.
 
“Net Share Settlement” shall mean settlement by the Issuer of its obligations
hereunder in accordance with Section 3(c).
 
“New Shares” means shares (whether of the offeror or a third party). “Number of
Shares” has the meaning ascribed to it in Section 2.
 
“Other Consideration” means cash and/or any securities (other than New Shares)
or assets (whether of the offeror or a third party).
 
“Payment Date” has the meaning ascribed to it in Section 3(b).
 
“Principal Account” means the notional principal account referred to in Section
3(a).
 
“Purchase Price” means $150,000,000, provided that such amount is subject to
downward adjustment in accordance with clause (y) of Section 2.
 
“Purchasing Date” means any Trading Day during the Execution Period.
 
“Reference Price” means the Closing Price of the Common Stock on the last
Trading Day of the Execution Period.

 
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“Related Exchange(s)” means each exchange or quotation system where trading has
a material effect (as determined by the Calculation Agent) on the overall market
for futures or options contracts relating to the Shares.
 
“Scheduled Trading Day” means any day on which the Exchange and each Related
Exchange are scheduled to be open for trading for their respective regular
trading sessions.
 
“Settlement Amount” shall mean (i) in the case of the Issuer, the amount of any
negative balance in the Principal Account as of the Calculation Date, and (ii)
in the case of UBS, the amount of any positive balance in the Principal Account
as of the Calculation Date, in each case as determined by the Calculation Agent,
and as adjusted by the Calculation Agent to reflect the accrual of interest
thereon at the rate set forth for that day opposite the caption “Open” under the
caption “Federal Funds” as displayed on Bloomberg Page BTMM, from and excluding
the third Trading Day following the Calculation Date hereunder to and including
the actual Payment Date, if the Payment Date occurs following the third Trading
Day following the Calculation Date hereunder. For avoidance of doubt, a
Settlement Amount shall not be adjusted for dividends declared and paid or
dividends expected during the period to which such Settlement Amount relates.
 
“Share-for-Combined” means, in respect of a Merger Event, that the consideration
for the relevant Shares consists of Combined Consideration.
 
“Share-for-Other” means, in respect of a Merger Event, that the consideration
for the relevant Shares consists solely of Other Consideration.
 
“Share-for-Share” means, in respect of a Merger Event, that the consideration
for the relevant Shares consists (or, at the option of the holder of such
Shares, may consist) solely of New Shares.
 
“Shelf Registration” means a registration statement in form and substance
reasonably acceptable to UBS for an offering to be made on a continuous basis
pursuant to Rule 415 under the Securities Act, registering UBS's resale, in any
manner or manners designated by UBS, of all the Stock Settlement Shares, any
Make-Whole Shares, and any other Shares held by UBS in connection with this
transaction which, in the opinion of counsel to UBS, are required to be included
in the Shelf Registration to be resold by UBS to the public.
 
“Short Squeeze” shall mean a situation where (i) UBS has determined, in its
judgment, that it is unable to hedge its exposure to the transaction
contemplated hereby because of the lack of sufficient shares of Common Stock
being made available for borrowing from lenders, including without limitation
UBS’s being required to redeliver shares of Common Stock to any lender at the
demand of such lender and not being able to meet such obligation in full in a
timely manner by reasonable efforts to borrow shares of Common Stock from
another lender or lenders, or (ii) UBS would incur a cost to borrow shares of
Common Stock to hedge its exposure to the transaction contemplated hereby that
is greater than a rate equal to **** basis points per annum.
 
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“Stock Settlement Amount” shall mean (i) in the case that the Issuer is required
to pay the Settlement Amount to UBS and has elected to pay the Settlement Amount
by delivery of shares of Common Stock to UBS pursuant to Section 3(c), an
amount, determined by the Calculation Agent, equal to the Settlement Amount to
be paid by the Issuer pursuant to Section 3(b), divided by the Reference Price,
and (ii) in the case that UBS is required to pay the Settlement Amount to the
Issuer and the Issuer has elected to require UBS to satisfy the obligation by
delivery of shares of Common Stock to the Issuer pursuant to Section 3(h), an
amount, determined by the Calculation Agent, equal to the Settlement Amount to
be paid by UBS pursuant to Section 3(b), divided by the weighted average price
per share actually paid by UBS to purchase such Stock Settlement Shares.
 
“Stock Settlement Shares” shall mean such whole number of shares included in the
Stock Settlement Amount.
 
“Termination Date” has the meaning ascribed to it in Section 4(b).
 
“Termination Event” shall mean the occurrence of a (i) Bankruptcy, (ii) Cross
Default, (iii) Failure to Pay or Deliver, (iv) Short Squeeze, (v) Dividend Event
or (vi) if so designated by UBS, a tender offer of the type described below in
Section 4(c).
 
“Termination Event Termination Date” has the meaning ascribed to it in Section 8
below.
 
“Trading Day” shall mean any day on which the Common Stock is traded on the
Exchange or, if not then traded on the Exchange, the principal securities
exchange or quotation system on which such securities are then traded or, if not
then traded on a securities exchange or quotation system, in the
over-the-counter market, and on which no Market Disruption Event occurs.
 
“Trading Disruption” means any suspension of or limitation imposed on trading by
the Exchange or Related Exchange or otherwise and whether by reason of movements
in price exceeding limits permitted by the Exchange or Related Exchange or
otherwise (i) relating to the Shares on the Exchange or (ii) in futures or
options contracts relating to the Shares on any Related Exchange.
 
“Tranche” shall have the meaning ascribed to it in Section 2.
 
Section 2. Purchase and Sale.
 
Subject to the terms and conditions set forth herein, UBS agrees to sell to the
Issuer, and the Issuer agrees to purchase from UBS, a number of shares (the
“Number of Shares”) of Common Stock (the “Shares”) equal to the quotient of (i)
the Purchase Price divided by (ii) the Closing Price of the Common Stock on the
date hereof, at a purchase price

 
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per Share equal to the Closing Price of the Common Stock on the date of
execution hereof (the “Execution Date”); provided that if the foregoing results
in a Number of Shares greater than 4,000,000, then (x) the Number of Shares
shall instead be equal to 4,000,000 and (y) the Purchase Price shall be adjusted
downward and shall equal the product of 4,000,000 and the Closing Price of the
Common Stock on the date hereof. At 4:00 P.M. on the third Trading Day after the
Execution Date (the “Settlement Date”), UBS shall deliver or cause to be
delivered the Shares through the facilities of The Depository Trust Company
(“DTC”) to the Issuer against payment by the Is suer of the Purchase Price by
wire transfer of immediately available funds. The parties understand and agree
that the delivery of the Shares by or on behalf of UBS upon the payment of the
aggregate Purchase Price by the Issuer is irrevocable and that as of the
Settlement Date the Issuer will be the sole beneficial owner of the Shares for
all purposes. The Number of Shares shall be divided into seven equal tranches
(each, a “Tranche”), which shall be designated, successively, Tranche One,
Tranche Two, Tranche Three, Tranche Four, Tranche Five, Tranche Six and Tranche
Seven.
 
As compensation to UBS for its commitment and services hereunder, the Issuer on
the Settlement Date will pay to UBS by wire transfer of immediately available
funds an additional amount equal to $360,000.00. This amount payable to UBS
shall not be subject to refund.
 
Section 3. Settlement.
 
(a) On the Settlement Date, the Calculation Agent shall establish a notional
Principal Account in an amount equal to the Purchase Price. The Calculation
Agent shall adjust the Principal Account daily as follows:
 
(i)           The Principal Account shall be reduced on the third day following
the Last Averaging Date of each Tranche in an amount equal to the product of (x)
the quotient of the Number of Shares divided by seven and (y) the Final
VWAP-Minus Price for that Tranche (the “Final Tranche Amount”). The parties
acknowledge that more than one Tranche may have the same Last Averaging Date.
 
(ii)           On the second Trading Day immediately following the Last
Averaging Date for each Tranche, the Calculation Agent will calculate the
Settlement Amount for that Tranche and, if applicable, the Stock Settlement
Amount, notify (the “Settlement Amount Notification”) the Issuer of the
Settlement Amount and, if applicable, the Stock Settlement Amount and provide a
schedule of its calculations thereof. The Calculation Agent shall respond
promptly to all questions raised by the Is suer relating to such calculations.
If the Is suer objects to the calculation of such Settlement Amount, the Issuer
shall promptly notify the Calculation Agent and UBS, and the Issuer and UBS
agree to use their good faith best efforts to reach an agreement as to such
Settlement Amount. In the further event that the Issuer and UBS are not able to
reach an agreement, the Issuer and UBS shall appoint a third party with
sufficient expertise to determine the calculation of the Settlement Amount and
such calculations shall be performed in good

 
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faith and in a commercially reasonable manner and shall be binding on all
parties. The fees and expenses of such expert shall be shared equally by the
Issuer and UBS.
 
(b)                   On the third Trading Day immediately following the
Calculation Date for the last Tranche (each, a “Payment Date”), if the
Settlement Amount is positive, UBS shall pay the Settlement Amount to the Issuer
and, if the Settlement Amount is negative, the Issuer shall pay the absolute
value of such Settlement Amount to UBS. Except as provided in paragraphs (c) and
(d) of this Section, all payments to be made under this Section 3 shall be made
on the applicable Payment Date by wire transfer of immediately available funds.
 
(c)                   If the Is suer is required to pay a Settlement Amount to
UBS pursuant to paragraph (b) of this Section or pursuant to Section 8 hereof,
the Issuer may, at its option, satisfy the obligation by the delivery to UBS of
a number of whole shares of Common Stock (and a payment of cash in lieu of
fractional shares, if any) equal to the Stock Settlement Amount. In order to
exercise this option, the Issuer must (each, a “Condition on Net Share
Settlement”) (i) notify UBS of its election to have any Settlement Amount
payable in shares of Common Stock no later than 3 days after the Last Averaging
Date in respect of the last Tranche (the “Stock Election Notice”), (ii) enter
into a registration rights agreement with UBS in form and substance reasonably
acceptable to UBS (the “Registration Rights Agreement”) no later than the 10th
day following such Last Averaging Date in respect of that Tranche, which
agreement will contain, among other things, customary representations and
warranties and indemnification and other rights, including rights to customary
opinions of counsel and accountant’s “comfort letters,” relating to the
registration of the Stock Settlement Shares, the Make-whole Shares and any
additional shares of Common Stock as to which UBS is named as a selling
securityholder in the Shelf Registration (the “Registered Shares”); (iii) have
taken all actions reasonable and appropriate so that such Shelf Registration
shall have been declared, or become automatically, effective by the Securities
and Exchange Commission the “SEC”) not less than 10 days following such Last
Averaging Date in respect of such Tranche; and (iv) use its reasonable best
efforts to maintain the effectiveness of such Shelf Registration until all
Registered Shares have been sold by UBS. Subject to paragraph 3(g) below, if any
of the conditions in the preceding sentence are not met, the provisions of this
paragraph (c) shall be inoperative and the Issuer shall be obligated to pay any
applicable Settlement Amount by wire transfer of immediately available funds. If
the Issuer complies with all of its obligations under this paragraph (c), then
at 9:30 A.M. on the applicable Payment Date in respect of such Tranche (or as
soon as practicable after the Payment Date after the conditions under this
paragraph (c) have been met), the Issuer shall deliver to UBS (x) fully paid and
nonassessable Stock Settlement Shares, via book entry transfer through the
facilities of DTC, in such denominations and in such names as UBS may specify
and (y) the cash payment, if any, in lieu of fractional shares by wire transfer
of immediately available funds. The parties understand and agree that the
deliveries made pursuant to the preceding sentence and the following paragraph
shall be irrevocable and shall satisfy in full the Issuer's obligations under
this Section 3. The Issuer covenants and agrees that it shall not elect net
share settlement in respect of any Settlement Amount owed hereunder unless it is
able to make the representation contained in Section 6(a)(viii) below as of the
effective date of any Stock Election Notice, and any Stock Election Notice shall
be deemed to include such representation.
 
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If the Issuer delivers Stock Settlement Shares to UBS pursuant to this paragraph
(c) and within ten Trading Days after the applicable Payment Date, UBS resells
all or any portion of the Stock Settlement Shares and the net proceeds received
by UBS upon resale of such shares exceeds the Settlement Amount (or if less than
all of the Stock Settlement Shares are resold, the applicable pro rata portion
of the Settlement Amount), UBS shall promptly refund in cash such difference to
the Issuer; provided that UBS may, at the Issuer’s option, satisfy its
obligation under this sentence by returning to the Issuer any portion of the
Stock Settlement Shares that would, if sold, have resulted in net proceeds in
excess of the Settlement Amount. In the event that such net proceeds are less
than the Settlement Amount (or if less than all of the Stock Settlement Shares
are resold, the applicable pro rata portion of the Settlement Amount), the
Issuer shall pay in cash or additional shares of Common Stock (the “Make-whole
Shares”) such difference (the “Make-whole Amount”) to UBS promptly after receipt
of notice thereof. In the event that Issuer elects to pay the Make-whole Amount
in additional shares of Common Stock, the requirements set forth in this
paragraph (c) with respect to payment of the Settlement Amount in Shares,
including Make-whole requirements, shall apply, such that UBS shall pay to the
Issuer any such excess and the Issuer shall pay to UBS in cash or Make-Whole
Shares any additional Make-Whole Amount. In calculating the net proceeds from
the resale of any Stock Settlement Shares there shall be deducted from such
proceeds any amount equal to the customary underwriting discount or commission
for underwritten offerings of common stock by companies comparable to the Issuer
multiplied by the total number of Shares sold for the account of UBS pursuant to
a Shelf Registration.
 
(d)                     Notwithstanding any other provision in this Agreement,
if Issuer exercises a right or is obligated pursuant to any provision of this
Agreement to deliver shares of Common Stock in respect of any Settlement Amount,
Issuer shall not be obliged to deliver, in connection with this Agreement, in
excess of 10,800,000 shares of Common Stock in the aggregate, as recalculated
from time to time (the “Determined Amount”). In the event that the Determined
Amount would be exceeded, Issuer would be obliged to deliver a number of shares
of Common Stock equal to the Determined Amount plus the Excess Shares, Issuer
agrees to (i) use its best efforts to increase its number of authorized shares,
thereby increasing the Determined Amount, to the extent necessary so that the
number of shares of Common Stock Issuer would be obliged to deliver does not
exceed the (recalculated) Determined Amount and (ii) allocate such newly
authorized shares of Common Stock in satisfaction of Issuer’s delivery
obligations under this Agreement in priority to any other use of such Common
Stock. For the avoidance of doubt, the obligation of Issuer to so use its best
efforts is an ongoing obligation.
 
(e)                    Is suer hereby represents and warrants that it will:
 
(i)         calculate the Determined Amount based on the maximum amount able to
be calculated in accordance with EITF 00-19 or any successor financial statement
guidance; and
 
(ii)        in respect of all equity derivative transactions in respect of which
Issuer’s equity securities constitute (all or part of) the
 
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instruments underlying such transactions (the “Derivative Trades”), use the same
methodology to derive the Determined Amount (howsoever described) applicable to
each Derivative Trade as is used to derive the Determined Amount for this
Agreement.
 
(f) UBS agrees that, in respect of any obligations Issuer has duly elected be
satisfied pursuant to Section 3(c) above, in the event of Issuer’s bankruptcy,
UBS shall not have rights in bankruptcy that rank senior to the rights in
bankruptcy of common shareholders of Issuer.
 
(g) If the Issuer has used its reasonable best efforts to satisfy the Conditions
on Net Share Settlement but has been unable to because the Shelf Registration is
not declared effective by the SEC within the time set out in paragraph 3(c) (or,
where UBS has previously agreed to extend such period based on a request by the
Issuer pursuant to paragraph3(g)(ii), within such period as extended pursuant to
paragraph 3(g)(ii)), then the Issuer may elect to:
 
(i)         deliver the relevant number of Shares to UBS in which case:
 
(A)            the day on which the Issuer makes such an election to deliver
such Shares is the “Issuer Election Date”, and
(B)            Issuer shall withdraw any Registration Statement filed with the
SEC in connection with the Shares, and
(C)            Is suer will enter into a private placement purchase agreement
with UBS in form and substance reasonably acceptable to UBS no later than the
next Trading Day following the Issuer Election Date, and
(D)            Issuer shall deliver to UBS such Shares on the Settlement Date
which, for the purposes of this paragraph 3(g)(i)(D), shall be the third Trading
Day following the Issuer Election Date, and
(E)            In addition to the initial Make-whole Amount paid by Issuer
pursuant to paragraph 3(c) herein, Issuer shall deliver to UBS such additional
Shares until UBS has realized actual net proceeds upon resale of such Shares
equal to the Settlement Amount. At its election, UBS may by a written notice to
Issuer retain a number of Shares delivered by Issuer pursuant to this paragraph
3(g)(i). If UBS so elects, UBS shall be deemed to have sold each such retained
Share for an amount equal to the price per Share obtained by UBS for the last
Share sold by UBS prior to sending written notice of its intention to retain
Shares to Issuer. In no event will UBS be obligated to exercise its right to
retain Shares; or
 
(ii)        request UBS to extend the period within which the Registration
Statement is to be declared effective by the SEC for a further period specified
in writing by UBS at the time of such extension.
 
(h) If UBS is required to pay a Settlement Amount to the Is suer pursuant to
paragraph (b) of this Section or pursuant to Section 8 hereof, the Issuer may,
at its option, elect that UBS satisfy the obligation by the delivery to the
Issuer of a number of whole shares of

 
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Common Stock (and a payment of cash in lieu of fractional shares, if any) equal
to the Stock Settlement Amount. In order to exercise this option, the Issuer
must notify UBS of its election to have any Settlement Amount payable in shares
of Common Stock no later than 15 days prior to the Payment Date (the “UBS Stock
Election Notice”). If the condition in the preceding sentence is not met, the
provisions of this paragraph (h) shall be inoperative and UBS shall be obligated
to pay any applicable Settlement Amount by wire transfer of immediately
available funds. If the Issuer complies with all of its obligations under this
paragraph (h), then at 9:30 A.M. on the Payment Date, UBS shall deliver to the
Issuer (i) fully paid and nonassessable Stock Settlement Shares, via book entry
transfer through the facilities of DTC, and (ii) the cash payment, if any, in
lieu of fractional shares by wire transfer of immediately available funds. The
parties understand and agree that the deliveries made pursuant to the preceding
sentence shall be irrevocable and shall satisfy in full UBS' obligations under
this Section 3.
 
Section 4. Anti-dilution Adjustments.
 
(a)                   Subdivisions and Combinations of Common Stock. In the
event that the outstanding shares of the Common Stock shall be subdivided or
split into a greater number of shares of Common Stock where the effective date
of such subdivision or the record date for such split occurs during the
Execution Period, the number of shares of Common Stock referred to herein shall
be deemed to be proportionately increased and the Final VWAP-Minus Price and
Discount shall be deemed to be proportionately decreased; conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock through a combination of shares of Common Stock or a
reverse stock split where the effective date of such combination or the record
date for such reverse stock split occurs during the Execution Period, the number
of shares of Common Stock referred to herein shall be deemed to be
proportionately decreased and the Final VWAP-Minus Price and Discount shall be
deemed to be proportionately increased. Any adjustment pursuant to this
paragraph (a) shall become effective (i) in the case of a subdivision or
combination of the Common Stock, at the close of business on the record date for
such subdivision or combination or (ii) in the case of a stock split or reverse
stock split, at the split, at the close of business on the record date for such
stock split or reverse stock split.
 
(b)                   Merger Events. In respect of each Merger Event, UBS and
the Issuer or the person formed by such consolidation or resulting from such
merger or which acquired such assets or which acquires the Issuer's Common
Stock, as the case may be, shall negotiate in good faith to amend this Agreement
to give appropriate effect to such transaction. In the event that the parties
are unable to reach an agreement ten (10) Trading Days prior to the effective
date of such transaction (the “Termination Date”), (i) the Execution Period
shall terminate on the Termination Date, (ii) the Principal Account shall be
reduced on such date by an amount equal to the product of (x) an amount equal to
the cash and fair market value (as determined by the Is suer's Board of
Directors whose good faith determination shall be conclusive and binding) of the
securities and/or property payable or distributable upon such transaction in
respect of one share of Common Stock and (y) the number of Borrowed Shares as of
such date, and (iii) the Settlement Amount shall be further adjusted by the
Calculation Agent by the amount that the Calculation Agent reasonably determines
in good faith to be UBS’s total losses and costs in

 
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connection with the early termination of this Agreement, including any loss of
option value, cost of funding, or loss or cost incurred as a result of its
terminating, liquidating, obtaining or reestablishing any hedge or related
trading position contemplated by this Agreement. The Calculation Agent shall
respond promptly to all questions raised by the Is suer relating to such
calculations. If the Is suer objects to the adjustments, the Is suer shall
promptly notify the Calculation Agent and UBS, and the Issuer and the UBS agree
to use their good faith best efforts to reach an agreement as to such Settlement
Amount. In the further event that the Issuer and UBS are not able to reach an
agreement, the Is suer and UBS shall appoint a third party with sufficient
expertise to determine the calculation of adjustment and such calculations shall
be performed in good faith and in a commercially reasonable manner and shall be
binding on all parties. The fees and expenses of such expert shall be shared
equally by the Issuer and UBS.
 
If payment is required by Issuer or by UBS to the Issuer in connection with a
Merger Event, the Issuer shall have the right, in its sole discretion, to elect
(the “Extraordinary Transaction Election”) to satisfy, or have UBS satisfy, any
such payment obligation by Net Share Settlement of this Transaction PROVIDED
THAT, in connection with a “Share-for-Combined” Merger Event or
“Share-for-Other” Merger Event, the Extraordinary Transaction Election is
available to satisfy only the percentage of such payment obligation equal to the
percentage of the non-cash consideration over the total Combined Consideration
(in the case of a “Share-for-Combined” Merger Event) or total Other
Consideration (in the case of a “Share-for-Other” Merger Event). The remaining
percentage of such payment obligation must be satisfied in the same form of
consideration that the holders of Common Stock are receiving in such Merger
Event. The Is suer shall make any election to settle the Transaction by way of
Net Share Settlement within two Trading Days of the Announcement Date but in any
event not less than twenty Trading Days prior to the effective date of such
merger.
 
(c)                   Tender Offers. In the event an offer is made to the
holders of Common Stock to tender shares of Common Stock for cash, UBS may, in
its discretion (i) accelerate the Last Averaging Date or (ii) cause the
Calculation Agent to adjust the Number of Shares. UBS or the Calculation Agent
shall notify the Is suer in writing as to the terms of any adjustment made
pursuant to this Section 4(c) no later than 5 days after the tender offer is
made.
 
(d)                   Other Events. In the event of any corporate event
involving the Issuer or the Common Stock not specifically addressed in
subsections (a), (b) or (c) of this Section 4 or in the event that the
Calculation Agent, in its good faith judgment, determines that the adjustments
described in subsections (a), (b) or (c) of this Section 4 will not result in an
equitable adjustment of the terms of the transaction described herein, and
provided that, in each case, such corporate event impacts the rights or
obligations of a holder of Common Stock, the terms of the transaction described
herein shall be subject to adjustment by the Calculation Agent (including,
without limitation, the First Averaging Date, the Last Averaging Date and the
Number of Shares) as in the exercise of its good faith judgment it deems
appropriate under the circumstances in order to result in an equitable
adjustment to this Transaction. The Calculation Agent shall respond promptly to
all questions raised by the Is suer relating to such calculations. If the Issuer
objects to the adjustments, the Issuer shall promptly notify the Calculation
Agent

 
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and UBS, and the Issuer and the UBS agree to use their good faith best efforts
to reach an agreement as to such Settlement Amount. In the further event that
the Is suer and UBS are not able to reach an agreement, the Issuer and UBS shall
appoint a third party with sufficient expertise to determine the calculation of
adjustment and such calculations shall be performed in good faith and in a
commercially reasonable manner and shall be binding on all parties. The fees and
expenses of such expert shall be shared equally by the Issuer and UBS.
 
Section 5. Acknowledgement.
 
The Issuer acknowledges and agrees that it is not relying, and has not relied,
upon UBS or Agent with respect to the legal, accounting, tax or other
implications of this Agreement and that it has conducted its own analysis of the
legal, accounting, tax and other implications of this Agreement. The Is suer
further acknowledges and agrees that neither UBS nor Agent have acted as its
advisor in any capacity in connection with this Agreement or the transactions
contemplated by this Agreement. The Issuer acknowledges that neither UBS nor
Agent is acting as the agent for the Is suer in effecting any purchase of Common
Stock pursuant to this Agreement. The Is suer understands and acknowledges that
UBS and its affiliates may from time to time effect transactions, for their own
account or the account of customers, and hold positions, in securities or
options on securities of the Issuer and that UBS and its affiliates may continue
to conduct such transactions during the Execution Period. The Is suer
understands and acknowledges that UBS and its affiliates intend to engage in
hedging activity that could affect the market for such securities and/or the
Common Stock that is the subject of this transaction, and consequently the cost
or proceeds to the Issuer hereunder.
 
Section 6. Representations and Warranties.
 
(a)                The Issuer hereby represents and warrants to UBS that:
 
(i)                it has (or, in the case of the Registration Rights Agreement,
will have when and if executed) all power and authority to enter into this
Agreement and the Registration Rights Agreement and the transactions
contemplated hereby and thereby;
 
(ii)               this Agreement has been duly authorized, validly executed and
delivered by the Issuer and constitutes a valid and legally binding obligation
of the Issuer enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
 
(iii)              the Registration Rights Agreement, when and if executed and
delivered pursuant to Section 3(c) hereof, shall have been duly authorized,
validly executed and delivered by the Issuer and shall constitute a valid and
legally binding obligation of the Issuer enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
 
14

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(iv)              if Stock Settlement Shares are delivered pursuant to Section
3(c) or Section 3(g), as the case may be, the Stock Settlement Shares, when
delivered to UBS or to the Issuer, as the case may be, will have been duly
authorized and will be duly and validly issued, fully paid and nonassessable and
free of preemptive and other rights;
 
(v)               the transactions contemplated by this Agreement, including the
delivery of the Stock Settlement Shares pursuant to Section 3(c) or Section
3(g), as the case may be, are consistent with the authorization of the
Repurchase Program;
 
(vi)              the Issuer is not entering into this Agreement to facilitate a
distribution of the Common Stock (or any security convertible into or
exchangeable for Common Stock) or in connection with a future issuance of
securities;
 
(vii)             the Is suer is not entering into this Agreement to create
actual or apparent trading activity in the Common Stock (or any security
convertible into or exchangeable for Common Stock) or to raise or depress the
price of the Common Stock (or any security convertible into or exchangeable for
Common Stock);
 
(viii)             as of the date hereof and as of the date of any Stock
Election Notice hereunder, (i) none of the Is suer and its executive officers
and directors is, or will be, as the case may be, aware of any material
nonpublic information regarding the Is suer or the Common Stock and (ii) all
reports and other documents filed by the Issuer with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended, when
considered as a whole (with the more recent such reports and documents deemed to
amend inconsistent or superseded statements contained in any earlier such
reports and documents), do not or will not, as the case may be, contain any
untrue statement of a material fact or any omission of a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances in which they were made, not misleading;
 
(ix)              the repurchase of the Shares by the Issuer, the compliance by
the Issuer with all of the provisions of this Agreement and the consummation of
the transactions herein contemplated will not conflict with or result in a
breach (each, a “Breach”) of any of the terms or provisions of, or constitute a
default (each a “Default”) under, any indenture, mortgage, deed of trust, loan
agreement or any other agreement or instrument to which the Issuer or any of its
subsidiaries is a party (collectively, “Contracts”) or by which the Issuer or
any of its subsidiaries is bound or to which any of the property or assets of
the Issuer or any of its subsidiaries is subject (except such Breach or Default
as would not reasonably be expected to materially adversely affect the ability
of the Issuer to perform its obligations under any Contract), nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Issuer or any of its subsidiaries is subject,
nor will such action result in any violation of the Certificate of Incorporation
or By-laws of the Issuer or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Issuer or any
of its properties; and

 
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(x) no consent, approval, authorization, order, registration or qualification of
or with any court or governmental agency or body having jurisdiction over the
Issuer or any of its properties is required for the repurchase of the Shares by
the Issuer, the compliance by the Issuer with all the terms of this Agreement,
or the consummation by the Issuer of the transactions contemplated by this
Agreement, other than the registration of the Stock Settlement Shares and any
Make-whole Shares under the Securities Act in accordance with the provisions of
Section 3(c), which registration shall be completed not less than 10 days
following the Last Averaging Date in respect of the first Tranche for which a
Stock Election Notice has been given, and such authorizations, orders,
registrations and qualifications as may be required under state securities or
blue sky laws in connection with the resale by UBS of the Registered Shares.
 
(b)                    UBS hereby represents and warrants to the Is suer:
 
(i)                it has all power and authority to enter into this Agreement
and the Registration Rights Agreement and the transactions contemplated hereby
and thereby;
 
(ii)               this Agreement has been duly authorized, validly executed and
delivered by UBS and constitutes a valid and legally binding obligation of UBS
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles; and
 
(iii)              the Registration Rights Agreement, when and if executed and
delivered pursuant to Section 3(c) hereof, shall have been duly authorized,
validly executed and delivered by UBS and shall constitute a valid and legally
binding obligation of UBS enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
 
(c)                    The Issuer and UBS hereto acknowledge that this
transaction is not secured by any collateral that would otherwise secure the
obligations of the Issuer.
 
(d)                    Each party hereto hereby covenants and agrees that it
shall comply, in all material respects, with all laws, rules and regulations to
which it is or may become subject in connection with the transactions
contemplated by this Agreement.
 
(e)                    Issuer hereby covenants and agrees that it shall notify
UBS in writing in accordance with the provisions of Section 9 below of the
declaration of any dividend or distribution constituting a Dividend Event not
less than thirty Scheduled Trading Days prior to the record date in respect of
any such dividend or distribution.
 
Section 7. Indemnification.

 
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(a) In the event that UBS becomes involved in any capacity in any action,
proceeding or investigation brought by or against any person in connection with
the transactions contemplated by this Agreement, the Issuer periodically will
reimburse UBS for its reasonable legal and other expenses (including the
reasonable cost of any investigation and preparation) incurred in connection
therewith; provided that such expenses will be promptly refunded to the Is suer
to the extent incurred in connection with a matter as to which UBS is not
entitled to indemnification under this Section 7. The Issuer also will indemnify
and hold UBS harmless against any losses, claims, damages or liabilities to
which UBS may become subject in connection with the transactions contemplated by
this Agreement, except to the extent that any such loss, claim, damage or
liability results from the gross negligence or bad faith of UBS in effecting the
transactions which are the subject of this Agreement. If for any reason the
foregoing indemnification is unavailable to UBS or insufficient to hold it
harmless, then the Issuer shall contribute to the amount paid or payable by UBS
as a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative benefits received by the Is suer on the one
hand and UBS on the other hand in the matters contemplated by this Agreement as
well as the relative fault of the Issuer and UBS with respect to such loss,
claim, damage or liability and any other relevant equitable considerations. The
relative benefits to the Issuer, on the one hand, and UBS, on the other hand,
shall be in the same proportion as the aggregate Purchase Price bears to the
commissions received by UBS pursuant to the last paragraph of Section 2. The
reimbursement, indemnity and contribution obligations of the Issuer under this
Section 7 shall be in addition to any liability which the Issuer may otherwise
have, shall extend upon the same terms and conditions to any affiliate of UBS
and the partners, directors, officers, agents, employees and controlling persons
(if any), as the case may be, of UBS and any such affiliate and shall be binding
upon and inure to the benefit of any successors, assigns, heirs and personal
representatives of the Issuer, UBS, any such affiliate and any such person. The
Issuer also agrees that neither UBS nor any of such affiliates, partners,
directors, officers, agents, employees or controlling persons shall have any
liability to the Issuer for or, in connection with any matter referred to in
this Agreement except to the extent that any losses, claims, damages,
liabilities or expenses incurred by the Issuer result from the gross negligence
or bad faith of UBS in effecting the transactions that are the subject of this
Agreement. The foregoing provisions shall survive any termination or completion
of this Agreement.
 
(b) Promptly after receipt by UBS or any of its affiliates, partners, directors,
agents, employees or controlling persons entitled to indemnification pursuant to
this Section 7 (each, an “Indemnified Party”) of notice of the commencement of
any action, such Indemnified Party will, if a claim in respect thereof may be
made against the Issuer under this Section 7, notify the Issuer in writing of
the commencement thereof, but the omission so to notify the Issuer will not
relieve it from any liability which it may have to any Indemnified Party under
this Section 7 except to the extent that the Is suer’s rights are materially
prejudiced as a result of such delay. Upon receipt of such notice, the Issuer
shall be entitled to participate at its own expense in the defense, or if it so
elects, to assume the defense of such action, in which event such defense shall
be conducted by counsel chosen by the Issuer and reasonably satisfactory to the
Indemnified Party or Indemnified Parties who shall be a defendant or
defendantsin any such action and such defendant or defendants shall bear the
fees and expenses of any additional counsel retained by them; but if the Issuer
shall elect not to assume the

 
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defense of such action, the Issuer will reimburse such Indemnified Party or
Indemnified Parties for the reasonable fees and expenses of any counsel retained
by them; provided however, if the defendants in any such action (including
impleaded parties) include both the Indemnified Parties and the Issuer and
counsel for the Indemnfied Parties shall have reasonably concluded that there
may be a conflict of interest involved in the representation by a single counsel
of both the Indemnified Parties and the Issuer, the Indemnified Party or
Indemnified Parties shall have the right to select separate counsel,
satisfactory to the Issuer (it being understood, however, that the Issuer shall
not be liable for the expenses of more than one separate counsel representing
Indemnified Parties who are parties to such action).
 
Section 8. Termination Event.
 
Upon the occurrence of a Termination Event and so long as such Termination Event
shall be continuing, UBS may, in its discretion, by notice to the Issuer (the
date of such notice and the notice referred to in the succeeding clause being
referred to herein as the “Notice Date”), direct that the Execution Period shall
forthwith terminate on the date specified in such notice (the “Termination Event
Termination Date”). In such an event, (i) the Execution Period shall terminate
on the Termination Event Termination Date, (ii) the Principal Account shall be
reduced on such date by an amount equal to the sum of (A) the product of (x) the
number of Hedge Account Shares and (y) the arithmetic average of daily
volume-weighted average prices of Shares in each Trading Day from the First
Averaging Date up to and excluding the Notice Date, as listed on Bloomberg
Screen Volume at Price Page and (B) the total purchase price paid by UBS for the
Shares of Common Stock that are purchased by UBS during the period commencing on
and including the Notice Date to and including the Termination Event Termination
Date in order to cover the remaining number of Borrowed Shares, (iii) the
Principal Account shall be increased to reflect an appropriate accrual of
interest at the Federal Funds Open Rate, as determined by the Calculation Agent,
to reflect interest earned by UBS in respect of the aggregate Purchase Price
received from the Issuer, (iv) the Principal Account shall be decreased to
reflect UBS’s actual cost of borrowing shares of Common Stock to hedge its
obligations hereunder, and (v) the Settlement Amount shall be further adjusted
by the amount that UBS reasonably determines in good faith to be its total
losses and costs in connection with the early termination of this Agreement,
including any loss of option value, cost of funding, or loss or cost incurred as
a result of its terminating, liquidating, obtaining or reestablishing any hedge
or related trading position contemplated by this Agreement. The Calculation
Agent shall respond promptly to all questions raised by the Is suer relating to
such calculations. If the Is suer objects to the adjustments, the Is suer shall
promptly notify the Calculation Agent and UBS, and the Issuer and the UBS agree
to use their good faith best efforts to reach an agreement as to such Settlement
Amount. In the further event that the Issuer and UBS are not able to reach an
agreement, the Is suer and UBS shall appoint a third party with sufficient
expertise to determine the calculation of adjustment and such calculations shall
be performed in good faith and in a commercially reasonable manner and shall be
binding on all parties. The fees and expenses of such expert shall be shared
equally by the Issuer and UBS.

 
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Section 9. Miscellaneous.
 
(a)                   Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and obligations set forth herein shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
 
(b)                   Assignment. Neither the rights under this Agreement nor
the obligations created by this Agreement shall be assignable or delegable, in
whole or in part, by either party hereto without the prior written consent of
the other (which consent shall not be unreasonably withheld), and any attempt to
assign or delegate any rights or obligations arising under this Agreement
without such consent shall be void.
 
(c)                   Waivers, etc. No failure or delay on the part of either
party in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No amendment, modification or waiver of any provision of this
Agreement nor consent to any departure by either party therefrom shall in any
event be effective unless the same shall be in writing and, in the case of a
waiver or consent, shall be effective only in the specific instance and for the
purpose for which given.
 
(d)                   Beneficiaries. This Agreement shall be binding upon, and
inure solely to the benefit of, the Issuer, UBS and, to the extent provided in
Section 7 hereof, the affiliates, partners, directors, officers, agents,
employees and controlling persons, if any, of UBS, and their respective
successors, assigns, heirs and personal representatives, and no other person
shall acquire any rights hereunder.
 
(e)                   Rights of Set-Off. In addition to any rights of set-off a
party may have as a matter of law or otherwise, upon occurrence of an Event of
Default with respect to the Issuer, UBS shall have the right, without prior
notice to the Issuer or any other person, to (i) set off any obligation of the
Issuer owing to UBS or any affiliate of UBS against any obligations of UBS or
any affiliate of UBS owing to the Issuer, or (ii) for the purpose of
cross-currency set-off, convert any obligation to another currency at the market
rate determined by UBS, or (iii) if an obligation is unascertained, in good
faith estimate that obligation and set off in respect of the estimate, subject
to the relevant party accounting to the other when the obligation is
ascertained. Nothing in this Section 9(e) will have the effect of creating a
charge or other security interest. Notwithstanding anything to the contrary in
the foregoing, UBS agrees not to set off or net amounts due from the Is suer
with respect to the transactions comtemplated by this Agreement against amounts
due from UBS to Issuer with respect to contracts or instruments that are not
Equity Contracts. ‘‘Equity Contract’’ means any transaction or instrument that
does not convey rights to UBS senior to claims of common stockholders in the
event of the Issuer’s bankruptcy.

 
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(f)                   Changes of Law. If, due to any change in applicable law or
regulations or the interpretation thereof by any court of law or other body
having jurisdiction subsequent to the date of this Agreement, performance of any
provision of this Agreement or any transaction contemplated thereby shall become
impracticable or impossible, the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as contemplated by such provision.
 
(g)                   Confidentiality. Subject to Section 5(a), to any contrary
requirement of law and to the right of each party to enforce its rights
hereunder in any legal action, each party shall keep strictly confidential and
shall cause its employees and agents to keep strictly confidential the terms of
this Agreement and any information of or concerning the other party which it or
any of its agents or employees may acquire pursuant to, or in the course of
performing its obligations under, any provision of this Agreement. In the event
disclosure is permitted pursuant to the preceding sentence, the disclosing party
shall (i) provide prior notice of such disclosure to the other party, (ii) use
its commercially reasonable efforts to minimize the extent of such disclosure
and (iii) comply with all reasonable requests of the other party to minimize the
extent of such disclosure. This Section 9(g) shall not prevent either party from
disclosing information as necessary to third-party advisors in connection with
the transactions contemplated hereby provided that such advisors agree in
writing to be bound by this Section 9(g) as if a party hereto. UBS hereby
consents to the issuance of a press release by the Issuer announcing its entry
into this Agreement and the filing with the SEC of a copy of this Agreement.
 
(h)                   Agent. UBS Securities LLC shall act as “agent” for UBS and
the Issuer within the meaning of Rule 1 5a-6 under the Exchange Act. The Agent
is not a principal to this Agreement and shall have no responsibility or
liability to UBS or the Issuer in respect of this Agreement, including, without
limitation, in respect of the failure of UBS or the Issuer to pay or perform
under this Agreement. Each of UBS and the Issuer agrees to proceed solely
against the other to collect or recover any securities or money owing to it in
connection with or as a result of this Agreement. The Agent shall otherwise have
no liability in respect of this Agreement, except for its gross negligence or
willful misconduct in performing its duties as Agent hereunder. As a
broker-dealer registered with the Securities and Exchange Commission, UBS
Securities LLC, in its capacity as agent, will be responsible for (i) effecting
the transaction contemplated in this Agreement, (ii) issuing all required
notices, confirmations and statements to Buyer and Seller and (iii) maintaining
books and records relating to this Agreement. The “agent” status described in
this paragraph is distinct from and does not encompass UBS Securities LLC’s role
as “Calculation Agent” under this Agreement, which is governed by the other
applicable provisions hereof.
 
(i)                   Headings. Descriptive headings herein are for convenience
only and shall not control or affect the meaning or construction of any
provision of this Agreement.
 
(j)                   Counterparts. This Agreement may be executed by the
parties hereto in counterparts, and each such executed counterpart shall be, and
shall be deemed to be, an

 
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original instrument and all such counterparts, taken together, shall constitute
one and the same instrument.
 
(k) Notices. All notices, consents, requests, instructions, approvals and other
communications provided for herein shall be validly given, made or served if in
writing and delivered personally, by telegram, by telecopy or sent by overnight
courier, postage prepaid, to:
 
UBS AG, London Branch at:
 
c/o UBS Securities LLC
299 Park Avenue, 29th Floor
New York, New York 10171
Attention of: Paul Stowell and Sanjeet Dewal
Fax Number: 212-821-4610
 
With a copy to such address to attention of:
Legal and External Affairs
 
the Issuer at:
 
MAXIMUS, Inc.
11419 Sunset Hills Road
Reston, Virginia 20190
Attention of: David N. Walker
Fax Number: 703-251-8240
 
With a copy to such address (which shall not constitute notice) to attention of:
 
MAXIMUS, Inc.
11419 Sunset Hills Road
Reston, Virginia 20190
Attention of: David R. Francis
Fax Number: 703-251-8240
 
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner. Notice given by telegram or telecopy
shall be deemed delivered when evidence of the transmission is received by the
sender and shall be confirmed in writing by overnight courier, postage prepaid.
Notice given by overnight courier as set out above shall be deemed delivered the
business day after the date the same is mailed.
 
(l)                                        Account Details.
 
UBS:
 
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Cash Payments for Stock Purchase
Citibank, New York
ABA# 021 000089
A/C# 4065 2556
UBS Securities, LLC
 
Cash Payments for Settlement
UBS AG Stamford
f/o UBS AG London Branch
ABA# 026-007-993
AC# 101-WA-140007-000
 
Issuer:
 
SunTrust Bank
8330 Boone Blvd, Suite 700
Vienna, VA 22182
ABA# 061000104
AC# 202174832
Account Name: MAXIMUS, Inc.
 
(m) Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the state of New York without reference
to conflict of law principles. Each party hereto irrevocably submits to the
extent permitted under applicable law to the non-exclusive jurisdiction of the
federal and state courts located in the Borough of Manhattan, State of New York.
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 this Agreement.
 
22

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IN WITNESS WHEREOF, UBS and the Issuer have caused this Agreement to be duly
authorized, executed and delivered as of the date first written above.
 

 
UBS AG, LONDON BRANCH
     
By:
   
Name:
Title:
     
By:
   
Name:
Title:
 
 
 
UBS SECURITIES LLC
     
By:
 
 
Name:
Title:
 
   
By:
   
Name:
Title:
     
MAXIMUS, INC.
     
By:
   
Name:
Title:

 
23