Exhibit 10.53

EXECUTION VERSION

 

   January 26, 2012   

To:

   CA, Inc.       One CA Plaza       Islandia, NY 11749       Attn:
James Hodge, SVP and Treasurer    Telephone: Redacted    Facsimile: Redacted

From

   Bank of America, N.A.       c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated       Bank of America Tower at One Bryant Park       New York, NY
10036       Attn: John Servidio       Telephone: Redacted       Facsimile:
Redacted   

Re:

   Issuer Forward Repurchase Transaction       (BofAML Reference Number:
128120185)   

Ladies and Gentlemen:

The purpose of this communication (this “Confirmation”) is to confirm the terms
and conditions of the Transaction entered into between Bank of America, N.A.
(“BofA”) and CA, Inc. (“Counterparty”) on the Trade Date specified below (the
“Transaction”). The terms of the Transaction shall be set forth in this
Confirmation and a Supplemental Terms Notice in the form of Schedule A hereto
(the “Supplemental Terms Notice”) that references this Confirmation. This
Confirmation and the Supplemental Terms Notice together shall constitute a
“Confirmation” as referred to in the ISDA Master Agreement specified below.

1. This Confirmation is subject to, and incorporates, the definitions and
provisions of the 2006 ISDA Definitions (including the Annex thereto) (the “2006
Definitions”) and the definitions and provisions of the 2002 ISDA Equity
Derivatives Definitions (the “Equity Definitions” and, together with the 2006
Definitions, the “Definitions”), in each case as published by the International
Swaps and Derivatives Association, Inc. (“ISDA”). In the event of any
inconsistency between the 2006 Definitions and the Equity Definitions, the
Equity Definitions will govern.

This Confirmation evidences a complete and binding agreement between BofA and
Counterparty as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall be subject to an agreement (the “Agreement”) in
the form of the 2002 ISDA Master Agreement (the “ISDA Form”) as if BofA and
Counterparty had executed an agreement in such form (without any Schedule but
with the elections set forth in this Confirmation); provided, however, that no
transaction now existing or hereafter entered into between BofA and Counterparty
shall constitute a Specified Transaction for purposes of the Agreement. The
Transaction shall be the only Transaction under the Agreement and shall not
constitute a “Transaction” (as such term is defined in the ISDA Form) under any
other agreement, including any ISDA Master Agreement currently existing or
entered into from time to time between BofA and Counterparty.

All provisions contained in, or incorporated by reference to, the Agreement will
govern this Confirmation except as expressly modified herein. In the event of
any inconsistency between this Confirmation and either the Definitions or the
Agreement, this Confirmation shall govern. The Transaction is a Share Forward
Transaction within the meaning set forth in the Equity Definitions.

--------------------------------------------------------------------------------

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

 

General Terms:   

Trade Date:

   January 26, 2012

Seller:

   BofA

Buyer:

   Counterparty

Shares:

   The common stock of Counterparty, par value USD 0.10 per share (Ticker
Symbol: “CA”)

Prepayment:

   Applicable

Prepayment Amount:

   As provided in Annex B to this Confirmation.

Prepayment Date:

   The first Exchange Business Day following the Trade Date

Exchange:

   NASDAQ Global Select Market

Related Exchange(s):

   All Exchanges

Calculation Agent:

   Bank of America, N.A., provided that, upon receipt of written request from
Counterparty, Calculation Agent shall promptly (but in no event later than
within five Exchange Business Days from the receipt of such request) provide
Counterparty with a written explanation describing in reasonable detail any
determination made by it (including any quotations, market data or information
from internal sources used in making such calculations, adjustments or
determinations, but without disclosing BofA’s proprietary models). All
determinations made and actions taken by Calculation Agent shall be made or
taken in good faith and a commercially reasonable manner. Valuation Terms:   

Initial Period Averaging Dates:

   Each of the consecutive Exchange Business Days commencing on, but excluding,
the Trade Date and ending on, and including, the Initial Period End Date (or if
such date is not an Exchange Business Day, the next following Exchange Business
Day).

Initial Period End Date:

   The Scheduled Initial Period End Date; provided that BofA shall have the
right, in its absolute discretion, at any time to accelerate the Initial Period
End Date to any date that is on or after the Earliest Initial Period End Date by
delivery of a Supplemental Terms Notice substantially in the form of Schedule A
to this Confirmation to Counterparty no later than 8:00 P.M., New York City
time, on the accelerated Initial Period End Date. BofA shall determine, in each
case in good faith and a commercially reasonable manner, the Initial Price, the
Floor Price and the Cap Price in the manner set forth below, and shall deliver
to Counterparty such Supplemental Terms Notice.

Scheduled Initial Period End Date:

   As provided in Annex B to this Confirmation.

Earliest Initial Period End Date:

   As provided in Annex B to this Confirmation.

Averaging Dates:

   Each of the consecutive Exchange Business Days commencing on, and including,
the Trade Date and ending on and including the Final Averaging Date.

Final Averaging Date:

   The Scheduled Final Averaging Date; provided that BofA shall have the right,
in its absolute discretion, at any time to accelerate the Final Averaging Date,
in whole or in part, to any date that is on or after the

 

2

--------------------------------------------------------------------------------

   Scheduled Earliest Acceleration Date by written notice to Counterparty no
later than 8:00 P.M., New York City time, on the Exchange Business Day
immediately following the accelerated Final Averaging Date.    In the case of
any acceleration of the Final Averaging Date in part (a “Partial Acceleration”),
(a) BofA shall specify in its written notice to Counterparty accelerating the
Final Averaging Date the corresponding percentage of the Prepayment Amount that
is subject to valuation on the related Valuation Date, (b) such portion of the
Prepayment Amount that is subject to valuation on the related Valuation Date
shall not be less than USD 50,000,000 (provided that, for the avoidance of
doubt, if the remaining portion of the Transaction corresponds to the Prepayment
Amount of less than USD 50,000,000, BofA shall be entitled to accelerate the
Transaction with respect to such full amount) and (c) Calculation Agent shall
adjust the terms of the Transaction as it deems appropriate in order to take
into account the occurrence of such Partial Acceleration (including cumulative
adjustments to take into account all Partial Accelerations that occur during the
term of the Transaction).

Scheduled Final Averaging Date:

   As provided in Annex B to this Confirmation (or if such date is not an
Exchange Business Day, the next following Exchange Business Day).

Scheduled Earliest Acceleration Date:

   As provided in Annex B to this Confirmation (or if such date is not an
Exchange Business Day, the next following Exchange Business Day).

Valuation Date:

   The Final Averaging Date.

Averaging Date Disruption:

   Modified Postponement, provided that, after the first reference to “Averaging
Date” in Section 6.7 of the Equity Definitions, the following shall be added
“(also including, solely for the purposes of this provision, any Initial Period
Averaging Date)”; and provided further that notwithstanding anything to the
contrary in the Equity Definitions, if a Market Disruption Event occurs on any
Initial Period Averaging Date or any Averaging Date, the Calculation Agent may,
if appropriate in light of market conditions, regulatory considerations or
otherwise, take any or all of the following actions: (a) postpone the Initial
Period End Date or the Scheduled Final Averaging Date, as the case may be, in
accordance with Modified Postponement (as modified herein) or (b) determine that
such Initial Period Averaging Date or Averaging Date is a Disrupted Day only in
part, in which case the Calculation Agent shall (i) determine the VWAP Price for
such Disrupted Day based on Rule 10b-18 eligible transactions in the Shares on
such Disrupted Day taking into account the nature and duration of such Market
Disruption Event and, among other things, the volume, historical trading
patterns and price of the Shares and (ii) determine the Initial Price or
Settlement Price, as the case may be, based on an appropriately weighted average
instead of the arithmetic average described under “Initial Price” or “Settlement
Price,” as the case may be, below. Any Exchange Business Day on which, as of the
date hereof, the Exchange is scheduled to close prior to its normal close of
trading shall be deemed not to be an Exchange

 

3

--------------------------------------------------------------------------------

   Business Day; if a closure of the Exchange prior to its normal close of
trading on any Exchange Business Day is scheduled following the date hereof,
then such Exchange Business Day shall be deemed to be a Disrupted Day in full.
Section 6.6(a) of the Equity Definitions is hereby amended by (A) adding the
words “based on, among other things, the volume, historical trading patterns and
price of the Shares” at the end of Section 6.6(a)(ii)(B) of the Equity
Definitions and (B) replacing the word “shall” in the fifth line of Section
6.6(a) of the Equity Definitions with the word “may” and by deleting clause (i)
thereof, and Section 6.7(c)(iii)(A) of the Equity Definitions is hereby amended
by replacing the word “shall” in the sixth and eighth lines thereof with the
word “may.”

Market Disruption Events:

   Section 6.3(a) of the Equity Definitions is hereby amended (a) by deleting
the words “during the one hour period that ends at the relevant Valuation Time,
Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as
the case may be” in clause (ii) thereof and (b) by replacing the words “or (iii)
an Early Closure.” therein with “(iii) an Early Closure, or (iv) a Regulatory
Disruption.”    Section 6.3(d) of the Equity Definitions is hereby amended by
deleting the remainder of the provision following the term “Scheduled Closing
Time” in the fourth line thereof.

Regulatory Disruption:

   Any event that BofA determines, in good faith and a commercially reasonable
manner and based on advice of counsel, makes it appropriate with regard to any
legal, regulatory or self-regulatory requirements or related policies and
procedures for BofA to refrain from or decrease any market activity in
connection with the Transaction. BofA shall notify Counterparty as soon as
reasonably practicable but no later than the second Business Day following such
Regulatory Disruption that a Regulatory Disruption has occurred and the Initial
Period Averaging Dates or the Averaging Dates affected by it. Settlement Terms:
  

Initial Share Delivery:

   On the Initial Share Delivery Date, BofA shall deliver to Counterparty the
Initial Shares.

Initial Share Delivery Date:

   The first Exchange Business Day following the Trade Date.

Initial Shares:

   As provided in Annex B to this Confirmation.

Settlement Date:

   The date that falls one Settlement Cycle following the Valuation Date.

Settlement:

   On the Settlement Date, if the Number of Shares to be Delivered is a positive
number, BofA shall deliver to Counterparty such Number of Shares to be
Delivered. If the Number of Shares to be Delivered is a negative number, the
Counterparty Settlement Provisions in Annex A shall apply.

Number of Shares to be Delivered:

   A number of Shares equal to (a) the Prepayment Amount divided by (b) the
Settlement Price; provided that the Number of Shares to be Delivered as so
determined shall be reduced by the aggregate number of shares delivered on the
Initial Share Delivery Date.

Settlement Price:

   (a) if the Averaging Period Price is equal to or less than the Floor Price,
the Settlement Price shall be equal to the sum of (i) the Floor Price multiplied
by the Collar Percentage and (ii) the Averaging Period Price multiplied by the
Non-Collar Percentage;

 

4

--------------------------------------------------------------------------------

   (b) if the Averaging Period Price is equal to or greater than the Cap Price,
the Settlement Price shall be equal to the sum of (i) the Cap Price multiplied
by the Collar Percentage and (ii) the Averaging Period Price multiplied by the
Non-Collar Percentage; and    (c) if the Averaging Period Price is less than the
Cap Price but greater than the Floor Price, the Settlement Price shall be the
Averaging Period Price.

Averaging Period Price:

   (a) The arithmetic average of the VWAP Prices for all Averaging Dates minus
(b) the Discount.

VWAP Price:

   For any Initial Period Averaging Date or Averaging Date, the Rule 10b-18
dollar volume weighted average price per Share for such day based on
transactions executed during such day, as reported on Bloomberg Page “CA.Q
<Equity> AQR SEC” (or any successor thereto) or, in the event such price is not
so reported on such day for any reason or is manifestly incorrect, as reasonably
determined by the Calculation Agent using a volume weighted method.

Discount:

   As provided in Annex B to this Confirmation.

Floor Price:

   As set forth in the Supplemental Terms Notice, to be the Floor Price
Percentage of the Initial Price.

Floor Price Percentage:

   As provided in Annex B to this Confirmation.

Cap Price:

   As set forth in the Supplemental Terms Notice, to be the Cap Price Percentage
of the Initial Price.

Cap Price Percentage:

   As provided in Annex B to this Confirmation.

Collar Percentage:

   As provided in Annex B to this Confirmation.

Non-Collar Percentage:

   As provided in Annex B to this Confirmation, to be a percentage obtained by
subtracting the Collar Percentage from 100%.

Initial Price:

   As set forth in the Supplemental Terms Notice, to be the arithmetic average
of the VWAP Prices for all Initial Period Averaging Dates.

Excess Dividend Amount:

   For the avoidance of doubt, all references to the Excess Dividend Amount in
Section 9.2(a)(iii) of the Equity Definitions shall be deleted.

Other Applicable Provisions:

   To the extent either party is obligated to deliver Shares hereunder, the
provisions of the last sentence of Section 9.2 and Sections 9.8, 9.9, 9.10, 9.11
(except that the Representation and Agreement contained in Section 9.11 of the
Equity Definitions shall be modified by excluding any representations therein
relating to restrictions, obligations, limitations or requirements under
applicable securities laws arising as a result of the fact that Counterparty is
the Issuer of the Shares) and 9.12 of the Equity Definitions will be applicable
as if “Physical Settlement” applied to the Transaction. Dividends:   

Dividend:

   Any dividend or distribution on the Shares other than any dividend or
distribution of the type described in Sections 11.2(e)(i), 11.2(e)(ii)(A) or
11.2(e)(ii)(B) of the Equity Definitions.

 

5

--------------------------------------------------------------------------------

Share Adjustments:   

Method of Adjustment:

   Calculation Agent Adjustment; provided that the declaration or payment of
Dividends shall not be a Potential Adjustment Event.    It shall constitute an
additional Potential Adjustment Event if the Scheduled Final Averaging Date is
postponed pursuant to “Averaging Date Disruption” above, in which case the
Calculation Agent may adjust any relevant terms of the Transaction as the
Calculation Agent determines appropriate to account for the economic effect on
the Transaction of such postponement, based on the strike price, stock price,
the remaining number of Averaging Dates, expected dividends or other dilutive
activities, stock borrow costs, interest rates, stock price volatility,
applicable credit spreads and ability to maintain a standard hedge position in
the Shares. Extraordinary Events:   

Consequences of Merger Events:

  

(a) Share-for-Share:

   Modified Calculation Agent Adjustment

(b) Share-for-Other:

   Cancellation and Payment

(c) Share-for-Combined:

   Component Adjustment

Tender Offer:

   Applicable

Consequences of Tender Offers:

  

(a) Share-for-Share:

   Modified Calculation Agent Adjustment

(b) Share-for-Other:

   Modified Calculation Agent Adjustment

(c) Share-for-Combined:

   Modified Calculation Agent Adjustment

Composition of Combined Consideration:

   Not Applicable

Consequences of Announcement Events:

   Modified Calculation Agent Adjustment as set forth in Section 12.3(d) of the
Equity Definitions; provided that references to “Tender Offer” shall be replaced
by references to “Announcement Event” and references to “Tender Offer Date”
shall be replaced by references to “Announcement Date.” An Announcement Event
shall be an “Extraordinary Event” for purposes of the Equity Definitions, to
which Article 12 of the Equity Definitions is applicable.

Announcement Event:

   The occurrence of an Announcement Date in respect of a potential Acquisition
Transaction (as defined in Section 9 below).

Announcement Date:

   The date of the first public announcement in relation to an Acquisition
Transaction, or any publicly announced change or amendment to the announcement
giving rise to an Announcement Date.

Provisions applicable to Merger Events and Tender Offers:

   The consequences set forth opposite “Consequences of Merger Events” and
“Consequences of Tender Offers” above shall apply regardless of whether a
particular Merger Event or Tender Offer relates to an Announcement Date for
which an adjustment has been made pursuant to Consequences of Announcement
Events, without duplication of any such adjustment.

 

6

--------------------------------------------------------------------------------

New Shares:

   In the definition of New Shares in Section 12.1(i) of the Equity Definitions,
the text in clause (i) thereof shall be deleted in its entirety (including the
word “and” following such clause (i)) and replaced with “publicly quoted, traded
or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market
or The NASDAQ Global Market (or their respective successors).”

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
shall 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 Market or The NASDAQ
Global Select Market (or their respective successors); if the Shares are
immediately re-listed, re-traded or re-quoted on any such exchange or quotation
system, such exchange or quotation system shall thereafter be deemed to be the
Exchange.

Additional Disruption Events:

  

Change in Law:

   Applicable; provided that (a) Section 12.9(a)(ii) of the Equity Definitions
is hereby amended by replacing the phrase “the interpretation” in the third line
thereof with the phrase “the formal or informal interpretation announced
publicly” and (b) for the avoidance of doubt, for purposes of Section
12.9(a)(ii) of the Equity Definitions, “any applicable law or regulation” shall
include the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,
any rules and regulations promulgated thereunder and any similar law or
regulation (collectively, “Dodd-Frank”) without regard to Section 739 of Dodd &
Frank or any similar legal certainty provision in any legislation enacted, or
rule or regulation promulgated, and the consequences specified in Section
12.9(b)(i) of the Equity Definitions shall apply to any Change in Law arising
from any such act, rule or regulation.

Failure to Deliver:

   Applicable

Insolvency Filing:

   Applicable

Hedging Disruption:

   Applicable

Increased Cost of Hedging:

   Applicable

Loss of Stock Borrow:

   Applicable

Maximum Stock Loan Rate:

   As provided in Annex B to this Confirmation.

Increased Cost of Stock Borrow:

   Applicable

Initial Stock Loan Rate:

   As provided in Annex B to this Confirmation.

Hedging Party:

   For all applicable Potential Adjustment Events and Extraordinary Events, BofA

Determining Party:

   For all Extraordinary Events, BofA; provided that, upon receipt of written
request from Counterparty, BofA shall promptly (but in no event later than
within seven Scheduled Trading Days from the receipt of such request) provide
Counterparty with a written explanation describing in reasonable detail any
determination made by it (including any quotations, market data or information
from internal sources used in making such determinations, but without disclosing
BofA’s proprietary models).

 

7

--------------------------------------------------------------------------------

Non-Reliance:

   Applicable

Agreements and Acknowledgments Regarding Hedging Activities:

   Applicable

Additional Acknowledgments:

   Applicable 3. Account Details:   

(a) Account for payments to Counterparty:

   To be provided separately upon request.

(b) Account for payments to BofA:

  

Bank of America

New York, NY

SWIFT: Redacted

Bank Routing: Redacted

Account Name: Bank of America

Account No.: Redacted

4. Offices:

(a) The Office of Counterparty for the Transaction is: Counterparty is not a
Multibranch Party

(b) The Office of BofA for the Transaction is:

Bank of America, N.A.

c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated

Bank of America Tower at One Bryant Park

New York, NY 10036

5. Notices: For purposes of this Confirmation:

(a) Address for notices or communications to Counterparty:

CA, Inc.

One CA Plaza

Islandia, NY 11749

Attn: James Hodge, SVP and Treasurer

Telephone: Redacted

Facsimile: Redacted

Attn: Pranab Biswas, VP and Asst. Treasurer

Telephone: Redacted

Facsimile: Redacted

(b) Address for notices or communications to BofA:

Bank of America, N.A.

c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated

Bank of America Tower at One Bryant Park

New York, NY 10036

Attn: John Servidio

Telephone: Redacted

Facsimile: Redacted

 

8

--------------------------------------------------------------------------------

6. Additional Provisions Relating to Transactions in the Shares.

(a) Counterparty acknowledges and agrees that the Initial Shares delivered on
the Initial Share Delivery Date may be sold short to Counterparty. Counterparty
further acknowledges and agrees that BofA may, during (i) the period from the
date hereof to the Valuation Date or, if later, the Scheduled Earliest
Acceleration Date without regard to any adjustment thereof pursuant to “Special
Provisions regarding Transaction Announcements” below, and (ii) the period from
and including the first Settlement Valuation Date to and including the last
Settlement Valuation Date, if any (together, the “Relevant Period”), purchase
Shares in connection with the Transaction, which Shares may be used to cover all
or a portion of such short sale or may be delivered to Counterparty. Such
purchases will be conducted independently of Counterparty. The timing of such
purchases by BofA, the number of Shares purchased by BofA on any day, the price
paid per Share pursuant to such purchases and the manner in which such purchases
are made, including without limitation whether such purchases are made on any
securities exchange or privately, shall be within the absolute discretion of
BofA, subject to Section 8(b) below. It is the intent of the parties that the
Transaction comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the
parties agree that this Confirmation shall be interpreted to comply with the
requirements of Rule 10b5-1(c), and Counterparty shall not take any action that
results in the Transaction not so complying with such requirements. Without
limiting the generality of the preceding sentence, Counterparty acknowledges and
agrees that (A) Counterparty does not have, and shall not attempt to exercise,
any influence over how, when or whether BofA effects any purchases of Shares in
connection with the Transaction, (B) during the period beginning on (but
excluding) the date of this Confirmation and ending on (and including) the last
day of the Relevant Period, Counterparty shall not, directly or indirectly,
communicate any information regarding Counterparty or the Shares to any employee
of BofA or its Affiliates responsible for trading the Shares in connection with
the transactions contemplated hereby, (C) Counterparty is entering into the
Transaction in good faith and not as part of a plan or scheme to evade
compliance with federal securities laws including, without limitation, Rule
10b-5 promulgated under the Exchange Act and (D) Counterparty will not alter or
deviate from this Confirmation or enter into or alter a corresponding hedging
transaction with respect to the Shares. Counterparty also acknowledges and
agrees that any amendment, modification, waiver or termination of this
Confirmation must be effected in accordance with the requirements for the
amendment or termination of a “plan” (as defined in Rule 10b5-1(c) under the
Exchange Act). Without limiting the generality of the foregoing, any such
amendment, modification, waiver or termination shall be made in good faith and
not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under
the Exchange Act, and no such amendment, modification or waiver shall be made at
any time at which Counterparty or any officer or director of Counterparty is
aware of any material nonpublic information regarding Counterparty or the
Shares.

(b) Counterparty agrees that neither Counterparty nor any of its Affiliates or
agents shall take any action that would cause Regulation M to be applicable to
any purchases of Shares, or any security for which the Shares are a reference
security (as defined in Regulation M), by Counterparty or any of its affiliated
purchasers (as defined in Regulation M) during the Relevant Period.

(c) Counterparty shall, at least one day prior to the first day of the Relevant
Period, notify BofA of the total number of Shares purchased in Rule 10b-18
purchases of blocks pursuant to the once-a-week block exception contained in
Rule 10b-18(b)(4) by or for Counterparty or any of its affiliated purchasers
during each of the four calendar weeks preceding the first day of the Relevant
Period and during the calendar week in which the first day of the Relevant
Period occurs (“Rule 10b-18 purchase,” “blocks” and “affiliated purchaser” each
being used as defined in Rule 10b-18).

(d) During the Relevant Period, Counterparty shall (i) notify BofA prior to the
opening of trading in the Shares on any day on which Counterparty makes any
public announcement (as defined in Rule 165(f) under the Securities Act of 1933,
as amended (the “Securities Act”) of any merger, acquisition, or similar
transaction involving a recapitalization relating to Counterparty (other than
any such transaction in which the consideration consists solely of cash and
there is no valuation period), unless such public announcement is made prior to
the opening or after the close of the regular trading session on the Exchange
for the Shares, (ii) promptly notify BofA following any such announcement that
such announcement has been made, and (iii) promptly deliver to BofA following
the making of any such announcement a certificate indicating (A) Counterparty’s
average daily Rule 10b-18 purchases (as defined in Rule 10b-18) during the three
full calendar months preceding the date of the announcement of such transaction
and (B) Counterparty’s block purchases (as defined in Rule 10b-18) effected
pursuant to paragraph (b)(4) of Rule 10b-18 during the three full calendar
months preceding the date of the announcement of such transaction. In addition,
Counterparty shall promptly notify BofA of the earlier to occur of the
completion of such transaction and the completion of the vote by target
shareholders. Counterparty acknowledges that any such public announcement may
result in a Regulatory Disruption and may cause the Relevant Period to be
suspended. Accordingly, Counterparty acknowledges that its actions in relation
to any such announcement or transaction must comply with the standards set forth
in Section 6(a) above.

 

9

--------------------------------------------------------------------------------

(e) Without the prior written consent of BofA (such consent not to be
unreasonably withheld, conditioned, or delayed), Counterparty shall not, and
shall cause its Affiliates and affiliated purchasers (each as defined in Rule
10b-18) not to, directly or indirectly (including, without limitation, by means
of a cash-settled or other derivative instrument) purchase, offer to purchase,
place any bid or limit order that would effect a purchase of, or commence any
tender offer relating to, any Shares (or an equivalent interest, including a
unit of beneficial interest in a trust or limited partnership or a depository
share) or any security convertible into or exchangeable for Shares during the
Relevant Period.

7. Representations, Warranties and Agreements.

(a) In addition to the representations, warranties and agreements in the
Agreement and those contained elsewhere herein, Counterparty represents and
warrants to and for the benefit of, and agrees with, BofA as follows:

(i) As of the Trade Date, and as of the date of any election by Counterparty of
the Share Termination Alternative under (and as defined in) Section 10(a) below,
(A) Counterparty is not aware of any material nonpublic information regarding
Counterparty or the Shares and (B) all reports and other documents filed by
Counterparty with the Securities and Exchange Commission pursuant to the
Exchange Act when considered as a whole (with the more recent such reports and
documents deemed to amend inconsistent statements contained in any earlier such
reports and documents), do not contain any untrue statement of a material fact
or any omission of a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances in which they
were made, not misleading.

(ii) Without limiting the generality of Section 13.1 of the Equity Definitions,
Counterparty acknowledges that BofA is not making any representations or
warranties or taking any position or expressing any view with respect to the
treatment of the Transaction under any accounting standards including ASC Topic
260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic
480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and
Hedging – Contracts in Entity’s Own Equity (or any successor issue statements)
or under FASB’s Liabilities & Equity Project.

(iii) Without limiting the generality of Section 3(a)(iii) of the Agreement, the
Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

(iv) Prior to the Trade Date, Counterparty shall deliver to BofA a resolution of
Counterparty’s board of directors authorizing the Transaction and such other
certificate or certificates as BofA shall reasonably request. Counterparty has
publicly disclosed as of the Trade Date its intention to institute a program for
the acquisition of Shares.

(v) Counterparty is not entering into this Confirmation to create actual or
apparent trading activity in the Shares (or any security convertible into or
exchangeable for Shares) or to raise or depress or otherwise manipulate the
price of the Shares (or any security convertible into or exchangeable for
Shares) or otherwise in violation of the Exchange Act, and will not engage in
any other securities or derivative transaction to such ends.

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

(vii) On the Trade Date, the Prepayment Date, the Initial Share Delivery Date
and the Settlement Date, Counterparty is not, or will not be, “insolvent” (as
such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11
of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be
able to purchase the Shares hereunder in compliance with the corporate laws of
the jurisdiction of its incorporation.

 

10

--------------------------------------------------------------------------------

(viii) No state or local law, rule, regulation or regulatory order applicable to
the Shares in the State of New York and the State of Delaware would give rise to
any reporting, consent, registration or other requirement (including without
limitation a requirement to obtain prior approval from any person or entity) as
a result of BofA or its affiliates owning or holding (however defined) Shares,
other than any such law, rule, regulation or order that applies (A) to the
ownership of equity positions generally without regard to the nature of
Counterparty’s business or (B) solely as a result of the business, identity,
place of business or jurisdiction of organization of BofA or any such affiliate.

(ix) Counterparty shall not declare or pay any Dividend (as defined above) to
holders of record as of any date occurring prior to the Settlement Date or, if
the provisions of Annex A apply, the Cash Settlement Payment Date, other than an
ordinary cash dividend of USD 0.25 per Share to holders of record on each of
February 14, 2012 and May 22, 2012.

(x) Counterparty understands that no obligations of BofA to it hereunder will be
entitled to the benefit of deposit insurance and that such obligations will not
be guaranteed by any affiliate of BofA or any governmental agency.

(b) Each of BofA and Counterparty agrees and represents that it is an “eligible
contract participant” as defined in Section 1a(12) of the U.S. Commodity
Exchange Act, as amended.

(c) Counterparty and BofA acknowledge that the offer and sale of the Shares
under the Transaction is intended to be exempt from registration under the
Securities Act, by virtue of Section 4(2) thereof. Accordingly, each of
Counterparty and BofA represents and warrants to the other that (i) it has the
financial ability to bear the economic risk of its investment in the Transaction
and is able to bear a total loss of its investment, (ii) it is an “accredited
investor” as that term is defined in Regulation D as promulgated under the
Securities Act, (iii) it is entering into the Transaction for its own account
and without a view to the distribution or resale thereof, and (iv) the
assignment, transfer or other disposition of the Transaction has not been and
will not be registered under the Securities Act and is restricted under this
Confirmation, the Securities Act and state securities laws.

(d) BofA represents to Counterparty that BofA is a “financial institution,”
“swap participant” and “financial participant” within the meaning of Sections
101(22), 101(53C) and 101(22A) of the Bankruptcy Code. The parties hereto
further agree and acknowledge that it is the intent of the parties that (A) this
Confirmation is (i) a “securities contract,” as such term is defined in
Section 741(7) of the Bankruptcy Code, with respect to which each payment and
delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the
Bankruptcy Code and a “settlement payment,” within the meaning of Section 546 of
the Bankruptcy Code and (ii) a “swap agreement,” as such term is defined in
Section 101(53B) of the Bankruptcy Code, with respect to which each payment and
delivery hereunder or in connection herewith is a “termination value,” “payment
amount” or “other transfer obligation” within the meaning of Section 362 of the
Bankruptcy Code and a “transfer,” as such term is defined in Section 101(54) of
the Bankruptcy Code and a “payment or other transfer of property” within the
meaning of Sections 362 and 546 of the Bankruptcy Code, and (B) BofA is entitled
to the protections afforded by, among other sections, Sections 362(b)(6),
362(b)(17), 362(o), 546(e), 546(g), 548(d)(2), 555, 560 and 561 of the
Bankruptcy Code.

(e) Counterparty and BofA each hereby acknowledges that any transactions by BofA
in the Shares will be undertaken by BofA as principal for its own account. All
of the actions to be taken by BofA in connection with this Agreement shall be
taken by BofA independently and without any advance or subsequent consultation
with Counterparty. BofA represents and warrants that it has in place and agrees
that it will maintain reasonable policies and procedures, taking into
consideration the nature of its business, to ensure that individuals making
investment decisions will not violate laws prohibiting trading on the basis of
material nonpublic information. Such individuals shall not be in possession of
material nonpublic information with respect to Counterparty during all relevant
times beginning on the date hereof and continuing through the Relevant Period.
Counterparty agrees, during the term of the Transaction, not to communicate
(other than through public disclosure within the meaning of Regulation FD) with
any “trading personnel” of BofA, provided that such “trading personnel” shall be
deemed to include Richard Chau, Francois Lu, Yury Mulman and Sean Groenwald.

 

11

--------------------------------------------------------------------------------

8. Agreements and Acknowledgements Regarding Hedging.

Counterparty acknowledges and agrees that:

(a) Subject to Section 8(b) below, Counterparty acknowledges and agrees that
(i) during the Relevant Period, BofA 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, (ii) BofA and its Affiliates also may be active in
the market for Shares other than in connection with hedging activities in
relation to the Transaction, (iii) BofA shall make its own determination as to
whether, when or in what manner any hedging or market activities in
Counterparty’s securities 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
Settlement Price or the VWAP Price, and (iv) any market activities of BofA and
its Affiliates with respect to Shares may affect the market price and volatility
of Shares, as well as the Settlement Price or the VWAP Price, each in a manner
that may be adverse to Counterparty.

(b) BofA acknowledges and agrees that during the Relevant Period, it shall
effect purchases of Shares in connection with the Transaction (including without
limitation purchases made for the purpose of covering any short position in
Shares), other than purchases made in connection with any dynamic adjustments to
BofA’s hedge positions in respect of the risk associated with the equity options
embedded in the Transaction, in a manner that BofA believes, based on the
representations, warranties and agreements of Counterparty set forth herein,
would comply with the limitations set forth in clauses (b)(2) and (b)(3) of Rule
10b-18 under the Exchange Act (“Rule 10b-18”). BofA and Counterparty have
determined the Scheduled Earliest Acceleration Date and the Scheduled Final
Averaging Date in contemplation of the clause (b)(4) of Rule 10b-18.

9. Special Provisions regarding Transaction Announcements.

(a) If a Transaction Announcement occurs on or prior to the Settlement Date,
then the Calculation Agent shall be entitled to make any adjustment to the
Discount and the Cap Price that the Calculation Agent determines is necessary to
account for the economic effect of such Transaction Announcement on the value of
the Transaction to BofA and, in connection with such adjustment, it shall take
into account factors that consist of the strike price, stock price, the
remaining number of Averaging Dates, expected dividends or other dilutive
activities, stock borrow costs, interest rates, stock price volatility,
applicable credit spreads and ability to maintain a standard hedge position in
the Shares, in each case solely to the extent, as a result of such Transaction
Announcement, such factors have an incremental economic effect on the valuation
of the Transaction to BofA as determined by it on or before the Initial Period
End Date (and, for the avoidance of doubt, in such event the Number of Shares to
be Delivered may be reduced below zero as a result of such adjustment). If a
Transaction Announcement occurs after the Trade Date but prior to the Scheduled
Earliest Acceleration Date, the Scheduled Earliest Acceleration Date shall be
adjusted to be the date of such Transaction Announcement.

(b) “Transaction Announcement” means (i) the announcement of an Acquisition
Transaction, (ii) an announcement that Counterparty or any of its subsidiaries
has entered into an agreement, a letter of intent or an understanding to enter
into an Acquisition Transaction, (iii) the announcement of an intention to
solicit or enter into, or to explore strategic alternatives or other similar
undertaking that may include, an Acquisition Transaction, or (iv) any other
announcement that in the reasonable judgment of the Calculation Agent may result
in an Acquisition Transaction. For the avoidance of doubt, announcements as used
in this definition of Transaction Announcement refer to any public announcement
whether made by the Issuer or a third party.

“Acquisition Transaction” means (i) any Merger Event (and for purposes of this
definition the definition of Merger Event shall be read with the references
therein to “100%” being replaced by “20%” and to “50%” by “80%” and as if the
clause beginning immediately following the definition of Reverse Merger therein
to the end of such definition were deleted) or Tender Offer, or any other
transaction involving the merger of Counterparty with or into any third party,
(ii) the sale or transfer of all or substantially all of the assets of
Counterparty, (iii) a recapitalization, reclassification, binding share exchange
or other similar transaction, (iv) any acquisition, lease, exchange, transfer,
disposition (including by way of spin-off or distribution) of assets (including
any capital stock or other ownership interests in subsidiaries) or other similar
event by Counterparty or any of its subsidiaries where the aggregate
consideration transferable or receivable by or to Counterparty or its
subsidiaries exceeds 20% of the market capitalization of Counterparty and
(v) any transaction

 

12

--------------------------------------------------------------------------------

in which Counterparty or its board of directors has a legal obligation to make a
recommendation to its shareholders in respect of such transaction (whether
pursuant to Rule 14e-2 under the Exchange Act or otherwise). For the avoidance
of doubt, neither the ownership of Shares by any person or entity which is the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
20% or more of the outstanding Shares prior to the Trade Date nor the ownership
of Shares by any person or entity by any person or entity which becomes the
beneficial owner of 20% or more of the outstanding Shares solely as a result of
an acquisition by Counterparty of Shares shall constitute an Acquisition
Transaction.

10. Other Provisions.

(a) Alternative Calculations and Payment on Early Termination and on Certain
Extraordinary Events. If either party would owe the other party any amount
pursuant to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or
pursuant to Section 6(d)(ii) of the Agreement (a “Payment Obligation”),
Counterparty shall have the right, in its sole discretion, to satisfy or to
require BofA to satisfy, as the case may be, any such Payment Obligation, in
whole or in part, by the Share Termination Alternative (as defined below) by
giving irrevocable telephonic notice to BofA, confirmed in writing within one
Scheduled Trading Day, no later than 9:30 A.M. New York City time on the Merger
Date, Tender Offer Date, Announcement Date, Early Termination Date or date of
cancellation or termination in respect of an Extraordinary Event, as applicable
(“Notice of Share Termination”); provided that Counterparty shall not have the
right to so elect (but, for the avoidance of doubt, BofA shall have the right to
so elect) in the event of (i) an Insolvency, a Nationalization, a Merger Event
or a Tender Offer, in each case, in which the consideration or proceeds to be
paid to holders of Shares consists solely of cash or (ii) an Event of Default in
which Counterparty is the Defaulting Party or a Termination Event in which
Counterparty is the Affected Party, which Event of Default or Termination Event
resulted from an event or events within Counterparty’s control. Upon such Notice
of Share Termination, the following provisions shall apply on the Scheduled
Trading Day immediately following the Merger Date, Tender Offer Date,
Announcement Date, Early Termination Date or date of cancellation or termination
in respect of an Extraordinary Event, as applicable, with respect to the Payment
Obligation or such portion of the Payment Obligation for which the Share
Termination Alternative has been elected (the “Applicable Portion”):

 

Share Termination Alternative:    Applicable and means, if delivery pursuant to
the Share Termination Alternative is owed by BofA, that BofA shall deliver to
Counterparty the Share Termination Delivery Property on the date on which the
Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of
the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, or
such later date as the Calculation Agent may reasonably determine (the “Share
Termination Payment Date”), in satisfaction of the Payment Obligation or the
Applicable Portion, as the case may be. If delivery pursuant to the Share
Termination Alternative is owed by Counterparty, paragraphs 2 through 5 of Annex
A shall apply as if such delivery were a settlement of the Transaction to which
Net Share Settlement (as defined in Annex A) applied, the Cash Settlement
Payment Date were the Early Termination Date, the Forward Cash Settlement Amount
were zero (0) minus the Payment Obligation (or the Applicable Portion, as the
case may be) owed by Counterparty, and “Shares” as used in Annex A were replaced
by “Share Termination Delivery Units.” Share Termination Delivery Property:    A
number of Share Termination Delivery Units, as calculated by the Calculation
Agent, equal to the Payment Obligation (or the Applicable Portion, as the case
may be) 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 of property contained in
one Share Termination Delivery Unit on the date such Share Termination Delivery
Units are to be delivered as Share Termination Delivery Property, as determined
by the Calculation Agent and notified by the Calculation Agent to the parties at
the time of notification of the Payment Obligation.

 

13

--------------------------------------------------------------------------------

Share Termination Delivery Unit:    In the case of a Termination Event, Event of
Default, Delisting or Additional Disruption Event, one Share or, in the case of
an Insolvency, Nationalization, Merger Event or Tender Offer, one Share or a
unit consisting of the number or amount of each type of property received by a
holder of one Share (without consideration of any requirement to pay cash or
other consideration in lieu of fractional amounts of any securities) in such
Insolvency, Nationalization, Merger Event or Tender Offer. If such Insolvency,
Nationalization, Merger Event or Tender Offer involves a choice of consideration
to be received by holders, such holder shall be deemed to have elected to
receive the maximum possible amount of cash. Failure to Deliver:    Applicable
Other applicable provisions:    If Share Termination Alternative is applicable,
the provisions of Sections 9.8, 9.9, 9.10, 9.11 (except that the Representation
and Agreement contained in Section 9.11 of the Equity Definitions shall be
modified by excluding any representations therein relating to restrictions,
obligations, limitations or requirements under applicable securities laws
arising as a result of the fact that Counterparty is the issuer of the Shares or
any portion of the Share Termination Delivery Units) and 9.12 of the Equity
Definitions will be applicable as if “Physical Settlement” applied to the
Transaction, except that all references to “Shares” shall be read as references
to “Share Termination Delivery Units.”

(b) Equity Rights. BofA acknowledges and agrees that this Confirmation is not
intended to convey to it rights with respect to the Transaction that are senior
to the claims of common stockholders in the event of Counterparty’s bankruptcy.
For the avoidance of doubt, the parties agree that the preceding sentence shall
not apply at any time other than during Counterparty’s bankruptcy to any claim
arising as a result of a breach by Counterparty of any of its obligations under
this Confirmation or the Agreement. For the avoidance of doubt, the parties
acknowledge that this Confirmation is not secured by any collateral that would
otherwise secure the obligations of Counterparty herein under or pursuant to any
other agreement.

(c) Indemnification. In the event that BofA or the Calculation Agent or any of
their Affiliates becomes involved in any capacity in any action, proceeding or
investigation brought by or against any person in connection with any matter
referred to in this Confirmation, Counterparty shall reimburse BofA or the
Calculation Agent or such Affiliate for its reasonable legal and other
out-of-pocket expenses (including the cost of any investigation and preparation)
incurred in connection therewith within 30 days of receipt of notice of such
expenses, and shall indemnify and hold BofA or the Calculation Agent or such
Affiliate harmless on an after-tax basis against any losses, claims, damages or
liabilities to which BofA or the Calculation Agent or such Affiliate may become
subject in connection with any such action, proceeding or investigation, except
to the extent that any losses and expenses result from the willful misconduct,
gross negligence or bad faith of BofA or the Calculation Agent or such
Affiliate. The reimbursement and indemnity obligations of Counterparty under
this Section 10(c) shall be in addition to any liability that Counterparty may
otherwise have, shall extend upon the same terms and conditions to the partners,
directors, officers, agents, employees and controlling persons (if any), as the
case may be, of BofA or the Calculation Agent and their Affiliates and shall be
binding upon and inure to the benefit of any successors, assigns, heirs and
personal representatives of Counterparty, BofA or the Calculation Agent, any
such Affiliate and any such person. Counterparty also agrees that neither BofA,
the Calculation Agent nor any of such Affiliates, partners, directors, officers,
agents, employees or controlling persons shall have any liability to
Counterparty for or in connection with any matter referred to in this
Confirmation except to the extent that any losses, claims, damages, liabilities
or expenses incurred by Counterparty result from the willful misconduct, gross
negligence or bad faith of BofA or the Calculation Agent or a breach by BofA or
the Calculation Agent of any of its covenants or obligations hereunder. The
foregoing provisions shall survive any termination or completion of the
Transaction.

 

14

--------------------------------------------------------------------------------

(d) Staggered Settlement. If BofA would owe Counterparty any Shares pursuant to
the “Settlement Terms” above, BofA may, by notice to Counterparty on or prior to
the Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares
deliverable on such Nominal Settlement Date on two or more dates (each, a
“Staggered Settlement Date”) or at two or more times on the Nominal Settlement
Date as follows: (i) in such notice, BofA will specify to Counterparty the
related Staggered Settlement Dates (each of which will be on or prior to such
Nominal Settlement Date) or delivery times and how it will allocate the Shares
it is required to deliver under “Settlement Terms” above among the Staggered
Settlement Dates or delivery times; and (ii) the aggregate number of Shares that
BofA will deliver to Counterparty hereunder on all such Staggered Settlement
Dates and delivery times will equal the number of Shares that BofA would
otherwise be required to deliver on such Nominal Settlement Date.

(e) Adjustments. For the avoidance of doubt, whenever the Calculation Agent is
called upon to make an adjustment pursuant to the terms of this Confirmation or
the Definitions to take into account the effect of an event, the Calculation
Agent 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.

(f) Transfer and Assignment. BofA may transfer or assign its rights and
obligations hereunder and under the Agreement, in whole or in part, to (i) any
of its Affiliates whose obligations hereunder and thereunder would be guaranteed
by Bank of America Corporation without consent of Counterparty or, (ii) any
third party (including any of BofA’s Affiliates) with the prior written consent
of Counterparty.

(g) Disposition of Hedge Shares. Counterparty hereby agrees that if, in the good
faith reasonable judgment of BofA, any Shares (the “Hedge Shares”) acquired by
BofA for the purpose of hedging its obligations pursuant to the Transaction
cannot be sold in the public market by BofA without registration under the
Securities Act, Counterparty shall, at its election: (i) in order to allow BofA
to sell the Hedge Shares in a registered offering, make available to BofA an
effective registration statement under the Securities Act to cover the resale of
such Hedge Shares and (A) enter into an agreement, in form and substance
satisfactory to BofA, substantially in the form of an underwriting agreement for
a registered offering, (B) provide accountant’s “comfort” letters in customary
form for registered offerings of equity securities, (C) provide disclosure
opinions of nationally recognized outside counsel to Counterparty reasonably
acceptable to BofA, (D) provide other customary opinions, certificates and
closing documents customary in form for registered offerings of equity
securities and (E) afford BofA a reasonable opportunity to conduct a “due
diligence” investigation with respect to Counterparty customary in scope for
underwritten offerings of equity securities; provided that if BofA, 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 Section 10(g) shall apply at the election of Counterparty;
(ii) in order to allow BofA 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, in form and substance commercially reasonably satisfactory to BofA
(in which case, the Calculation Agent shall make any adjustments to the terms of
the Transaction that are necessary, in its reasonable judgment, to compensate
BofA 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 BofA at the Volume Weighted Average Price on such Exchange Business Days,
and in the amounts, requested by BofA. “Volume Weighted Average Price” means, on
any Exchange Business Day, the per Share volume-weighted average price as
displayed under the heading “Bloomberg VWAP” on Bloomberg page CA.Q <equity> VAP
(or any successor thereto) in respect of the period from 9:30 a.m. to 4:00 p.m.
(New York City time) on such Exchange Business Day (or if such volume-weighted
average price is unavailable or is manifestly incorrect, the market value of one
Share on such Exchange Business Day, as determined by the Calculation Agent
using a volume-weighted method).

(h) Additional Termination Event. It shall constitute an Additional Termination
Event with respect to which the Transaction is the sole Affected Transaction and
Counterparty is the sole Affected Party and BofA shall be the party entitled to
designate an Early Termination Date pursuant to Section 6(b) of the Agreement
if, at any time during the Relevant Period, the price per Share on the Exchange,
as determined by the Calculation Agent, is at or below the Threshold Price (as
provided in Annex B to this Confirmation).

 

15

--------------------------------------------------------------------------------

(i) Amendments to Equity Definitions. The following amendments shall be made to
the Equity Definitions:

(i) Section 11.2(a) of the Equity Definitions is hereby amended by deleting the
words “a diluting or concentrative effect on the theoretical value of the
relevant Shares” and replacing them with the words “an economic effect on the
relevant Transaction”;

(ii) The first sentence of Section 11.2(c) of the Equity Definitions, prior to
clause (A) thereof, is hereby amended to read as follows: “(c) If ‘Calculation
Agent Adjustment’ is specified as the Method of Adjustment in the related
Confirmation of a Share Option Transaction or Share Forward Transaction, then
following the announcement or occurrence of any Potential Adjustment Event, the
Calculation Agent will determine whether such Potential Adjustment Event has an
economic effect on the Transaction and, if so, will (i) make appropriate
adjustment(s), if any, to any one or more of:” and clause (B) thereof is hereby
amended by inserting, after “the Forward Price,” “the Floor Price, the Cap
Price” and the portion of such sentence immediately preceding clause
(ii) thereof is hereby amended by deleting the words “diluting or concentrative”
and the words “(provided that no adjustments will be made to account solely for
changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares)” and replacing such latter phrase with the words “(and,
for the avoidance of doubt, adjustments may be made to account solely for
changes in volatility, stock loan rate or liquidity relative to the relevant
Shares)”;

(iii) Section 11.2(e)(vii) of the Equity Definitions is hereby amended by
deleting the words “diluting or concentrative effect on the theoretical value of
the relevant Shares” and replacing them with the words “economic effect on the
relevant Transaction”;

(iv) 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) at BofA’s option, 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”;

(v) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by
(A) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)”
following subsection (A) and (3) the phrase “in each case” in subsection (B);
and (B) deleting the phrase “neither the Non-Hedging Party nor the Lending Party
lends Shares in the amount of the Hedging Shares or” in the penultimate
sentence; and

(vi) Section 12.9(b)(v) of the Equity Definitions is hereby amended by
(A) adding the word “or” immediately before subsection “(B)” and deleting the
comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its
entirety, (2) deleting the word “or” immediately preceding subsection (C) and
(3) replacing in the penultimate sentence the words “either party” with “the
Hedging Party” and (4) deleting clause (X) in the final sentence.

(j) No Set-off. 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.

(k) 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.

(l) Designation by BofA. Notwithstanding any other provision in this
Confirmation to the contrary requiring or allowing BofA to purchase, sell,
receive or deliver any Shares or other securities to or from Counterparty, BofA
(the “Designator”) may designate any of its Affiliates (the “Designee”) to
deliver or take delivery, as the case may be, and otherwise perform its
obligations to deliver, if any, or take delivery of, as the case may be, any
such Shares or other securities in respect of the Transaction, and the Designee
may assume such obligations, if any. Such designation shall not relieve the
Designator of any of its obligations, if any, hereunder. Notwithstanding the
previous sentence, if the Designee shall have performed the obligations, if any,
of the Designator hereunder, then the Designator shall be discharged of its
obligations, if any, to Counterparty to the extent of such performance.

 

16

--------------------------------------------------------------------------------

(m) Termination Currency. The Termination Currency shall be USD.

(n) Agreements regarding the Supplemental Terms Notice.

(i) Counterparty accepts and agrees to be bound by the contractual terms and
conditions as set forth in the Supplemental Terms Notice for the Transaction.
Upon receipt of the Supplemental Terms Notice, Counterparty shall promptly
execute and return the Supplemental Terms Notice to BofA; provided that
Counterparty’s failure to so execute and return the Supplemental Terms Notice
shall not affect the binding nature of the Supplemental Terms Notice, and the
terms set forth therein shall be binding on Counterparty to the same extent, and
with the same force and effect, as if Counterparty had executed a written
version of the Supplemental Terms Notice.

(ii) Counterparty and BofA agree and acknowledge that (A) the transactions
contemplated by this Confirmation will be entered into in reliance on the fact
that this Confirmation and the Supplemental Terms Notice form a single agreement
between Counterparty and BofA, and BofA would not otherwise enter into such
transactions, (B) this Confirmation, as amended by the Supplemental Terms
Notice, is a “qualified financial contract,” as such term is defined in
Section 5-701(b)(2) of the General Obligations Law of New York (the “General
Obligations Law”), (C) the Supplemental Terms Notice, regardless of whether the
Supplemental Terms Notice is transmitted electronically or otherwise,
constitutes a “confirmation in writing sufficient to indicate that a contract
has been made between the parties” hereto, as set forth in
Section 5-701(b)(3)(b) of the General Obligations Law; and (D) this Confirmation
constitutes a prior “written contract,” as set forth in Section 5-701(b)(1)(b)
of the General Obligations Law, and each party hereto intends and agrees to be
bound by this Confirmation, as supplemented by the Supplemental Terms Notice.

(iii) Counterparty and BofA further agree and acknowledge that this
Confirmation, as supplemented by the Supplemental Terms Notice, constitutes a
contract “for the sale or purchase of a security,” as set forth in Section 8-113
of the Uniform Commercial Code of New York.

(o) Waiver of Trial by Jury. EACH OF COUNTERPARTY AND BOFA HEREBY IRREVOCABLY
WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON
BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THE TRANSACTION OR THE ACTIONS OF BOFA OR ITS AFFILIATES IN THE
NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

(p) Governing Law; Jurisdiction. THIS CONFIRMATION AND ANY CLAIM, CONTROVERSY OR
DISPUTE ARISING UNDER OR RELATED TO THIS CONFIRMATION SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK. 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.

 

17

--------------------------------------------------------------------------------

Please confirm your agreement to be bound by the terms stated herein by
executing the copy of this Confirmation enclosed for that purpose and returning
it to us by mail or facsimile transmission to the address for Notices indicated
above.

 

Yours sincerely, BANK OF AMERICA, N.A. By:   /s/ Jake Mendelsohn Name:   Jake
Mendelsohn Title:   Managing Director

Confirmed as of the date first above written:

 

CA, INC. By:   /s/ James Hodge Name:   James Hodge Title:   SVP and Treasurer

--------------------------------------------------------------------------------

SCHEDULE A

SUPPLEMENTAL TERMS NOTICE

 

To:    CA, Inc.       One CA Plaza    Islandia, NY 11749    Attn:    James
Hodge, SVP and Treasurer    Telephone:   

Redacted

   Facsimile:   

Redacted

From:    Bank of America, N.A. Subject:    Issuer Forward Repurchase Transaction
Ref. No:    Redacted

Date:

   [                    ]

 

 

Ladies and Gentlemen:

The purpose of this Supplemental Terms Notice is to notify you of certain terms
of the Transaction dated January 26, 2012 between Bank of America, N.A. (“BofA”)
and CA, Inc. (“Counterparty”).

The definitions and provisions contained in the Confirmation dated as of
January 26, 2012 between BofA and Counterparty (the “Confirmation”) are
incorporated into this Supplemental Terms Notice. In the event of any
inconsistency between those definitions and provisions and this Supplemental
Terms Notice, this Supplemental Terms Notice will govern.

 

1. The terms of the Transaction to which this Supplemental Terms Notice relates
are as follows:

 

  Initial Period End Date:    [                    ]   Initial Price:   
USD[            ] per Share [the arithmetic average of the VWAP Prices for all
Initial Period Averaging Dates]   Floor Price:    USD[            ] [the product
of the Floor Price Percentage and the Initial Price]   Cap Price:   
USD[            ] [the product of the Cap Price Percentage and the Initial
Price]

--------------------------------------------------------------------------------

Yours sincerely, BANK OF AMERICA, N.A. By:     Name:   Title:  

 

Receipt Acknowledged: CA, INC. By:     Name:   Title:  

--------------------------------------------------------------------------------

ANNEX A

COUNTERPARTY SETTLEMENT PROVISIONS

1. The following Counterparty Settlement Provisions shall apply to the extent
indicated under the Confirmation:

 

Settlement Currency:

   USD Settlement Method Election:    Applicable; provided that (i) Section 7.1
of the Equity Definitions is hereby amended by deleting the word “Physical” in
the sixth line thereof and replacing it with the words “Net Share” and (ii) the
Electing Party may make a settlement method election only if the Electing Party
represents and warrants to BofA in writing on the date it notifies BofA of its
election that, as of such date, (A) none of Counterparty and its officers and
directors is aware of any material nonpublic information regarding Counterparty
or the Shares and (B) all reports and other documents filed by Counterparty with
the Securities and Exchange Commission pursuant to the Exchange Act when
considered as a whole (with the more recent such reports and documents deemed to
amend inconsistent statements contained in any earlier such reports and
documents), do not contain any untrue statement of a material fact or any
omission of a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading. Electing Party:    Counterparty Settlement Method   
Election Date:    The date 10 Exchange Business Days prior to the Valuation
Date; provided that if BofA accelerates the Final Averaging Date pursuant to the
proviso to the definition of Final Averaging Date, the Settlement Method
Election Date shall be the second Exchange Business Day immediately following
the Valuation Date. Default Settlement Method:    Cash Settlement Special
Settlement:    Either (i) a settlement to which this Annex A applies that
follows the occurrence of a Transaction Announcement to which Section 9 of this
Confirmation applies or (ii) any settlement to which paragraphs 2 through 5 of
this Annex A apply that follows a termination or cancellation of the Transaction
pursuant to Section 6 of the Agreement or Article 12 of the Equity Definitions
to which Section 10(a) of this Confirmation applies. Forward Cash Settlement   
Amount:    The Number of Shares to be Delivered multiplied by the Settlement
Valuation Price. Settlement Valuation Price:    The arithmetic average of the
VWAP Prices for all Settlement Valuation Dates, subject to Averaging Date
Disruption, determined as if each Settlement Valuation Date were an Averaging
Date (with Averaging Date Disruption applying as if the last Settlement
Valuation Date were the Final Averaging Date and the Settlement Valuation Price
were the Settlement Price). Settlement Valuation Dates:    A number of Scheduled
Trading Days selected by BofA in its reasonable discretion, beginning on the
Scheduled Trading Day immediately following the later of the Settlement Method
Election Date and the Final Averaging Date.

 

A-1

--------------------------------------------------------------------------------

Cash Settlement:    If Cash Settlement is applicable, then Counterparty shall
pay to BofA the absolute value of the Forward Cash Settlement Amount on the Cash
Settlement Payment Date. Cash Settlement Payment Date:    The date one
Settlement Cycle following the last Settlement Valuation Date. Net Share
Settlement Procedures:    If Net Share Settlement is applicable, Net Share
Settlement shall be made in accordance with paragraphs 2 through 5 below.

2. Net Share Settlement shall be made by delivery on the Settlement Date of a
number of Shares equal to the product of 102% and the absolute value of the
Number of Shares to be Delivered; provided that in the case of a Special
Settlement, Net Share Settlement shall be made (i) by delivery on the Cash
Settlement Payment Date (such date, the “Net Share Settlement Date”) of a number
of Shares (the “Restricted Payment Shares”) with a value equal to the absolute
value of the Forward Cash Settlement Amount, with such Shares’ value based on
the realizable market value thereof to BofA (which value shall take into account
an illiquidity discount resulting from the fact that the Restricted Payment
Shares will not be registered for resale), as determined by the Calculation
Agent (the “Restricted Share Value”), and paragraph 3 of this Annex A shall
apply to such Restricted Payment Shares, and (ii) by delivery of the Make-Whole
Payment Shares as described in paragraph 4 below.

3. (a) All Restricted Payment Shares and Make-Whole Payment Shares shall be
delivered to BofA (or any affiliate of BofA designated by BofA) pursuant to the
exemption from the registration requirements of the Securities Act provided by
Section 4(2) thereof.

(b) As of or prior to the date of delivery, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, BofA and any potential purchaser of any such Shares from
BofA (or any affiliate of BofA designated by BofA) identified by BofA shall be
afforded a commercially reasonable opportunity to conduct a due diligence
investigation with respect to Counterparty customary in scope for private
placements of equity securities (including, without limitation, the right to
have made available to them for inspection all financial and other records,
pertinent corporate documents and other information reasonably requested by
them).

(c) As of the date of delivery, Counterparty shall enter into an agreement (a
“Private Placement Agreement”) with BofA (or any affiliate of BofA designated by
BofA) in connection with the private placement of such Shares by Counterparty to
BofA (or any such affiliate) and the private resale of such Shares by BofA (or
any such affiliate), substantially similar to private placement purchase
agreements customary for private placements of equity securities, in form and
substance commercially reasonably satisfactory to BofA, which Private Placement
Agreement shall include, without limitation, provisions substantially similar to
those contained in such private placement purchase agreements relating to the
indemnification of, and contribution in connection with the liability of, BofA
and its affiliates, and shall provide for the payment by Counterparty of all
fees and expenses in connection with such resale, including all fees and
expenses of counsel for BofA, and shall contain representations, warranties and
agreements of Counterparty reasonably necessary or advisable to establish and
maintain the availability of an exemption from the registration requirements of
the Securities Act for such resales.

(d) Counterparty shall not take or cause to be taken any action that would make
unavailable either (i) the exemption set forth in Section 4(2) of the Securities
Act for the sale of any Restricted Payment Shares or Make-Whole Payment Shares
by Counterparty to BofA or (ii) an exemption from the registration requirements
of the Securities Act reasonably acceptable to BofA for resales of Restricted
Payment Shares and Make-Whole Payment Shares by the BofA (or an affiliate of
BofA).

(e) Counterparty expressly agrees and acknowledges that the public disclosure of
all material information relating to Counterparty is within Counterparty’s
control.

 

A-2

--------------------------------------------------------------------------------

4. If Restricted Payment Shares are delivered in accordance with paragraph 3
above, on the last Settlement Valuation Date, a balance (the “Settlement
Balance”) shall be established with an initial balance equal to the absolute
value of the Forward Cash Settlement Amount. Following the delivery of
Restricted Payment Shares or any Make-Whole Payment Shares, BofA shall sell all
such Restricted Payment Shares or Make-Whole Payment Shares in a commercially
reasonable manner. At the end of each Exchange Business Day upon which sales
have been made, the Settlement Balance shall be reduced by an amount equal to
the aggregate proceeds received by BofA or its affiliate upon the sale of such
Restricted Payment Shares or Make-Whole Payment Shares, less a customary and
commercially reasonable private placement fee for private placements of common
stock by similar issuers. If, on any Exchange Business Day, all Restricted
Payment Shares and Make-Whole Payment Shares have been sold and the Settlement
Balance has not been reduced to zero, Counterparty shall (i) deliver to BofA or
as directed by BofA one Settlement Cycle following such Exchange Business Day an
additional number of Shares (the “Make-Whole Payment Shares” and, together with
the Restricted Payment Shares, the “Payment Shares”) equal to (x) the Settlement
Balance as of such Exchange Business Day divided by (y) the Restricted Share
Value of the Make-Whole Payment Shares as of such Exchange Business Day or
(ii) promptly deliver to BofA cash in an amount equal to the then remaining
Settlement Balance. This provision shall be applied successively until either
the Settlement Balance is reduced to zero or the aggregate number of Restricted
Payment Shares and Make-Whole Payment Shares equals the Maximum Deliverable
Number. If on any Exchange Business Day, Restricted Payment Shares and
Make-Whole Payment Shares remain unsold and the Settlement Balance has been
reduced to zero, BofA shall promptly return such unsold Restricted Payment
Shares or Make-Whole Payment Shares.

5. Notwithstanding the foregoing, in no event shall Counterparty be required to
deliver more than the Maximum Deliverable Number of Shares hereunder. “Maximum
Deliverable Number” means the number of Shares set forth as such in Annex B to
this Confirmation. Counterparty represents and warrants to BofA (which
representation and warranty shall be deemed to be repeated on each day from the
date hereof to the Settlement Date or, if Counterparty has elected to deliver
any Payment Shares hereunder in connection with a Special Settlement, to the
date on which resale of such Payment Shares is completed (the “Final Resale
Date”)) that the Maximum Deliverable Number is equal to or less than the number
of authorized but unissued Shares of Counterparty that are not reserved for
future issuance in connection with transactions in such Shares (other than the
transactions under this Confirmation) on the date of the determination of the
Maximum Deliverable Number (such Shares, the “Available Shares”). In the event
Counterparty shall not have delivered the full number of Shares otherwise
deliverable as a result of this paragraph 5 (the resulting deficit, the “Deficit
Shares”), Counterparty shall be continually obligated to deliver, from time to
time until the full number of Deficit Shares have been delivered pursuant to
this paragraph, Shares when, and to the extent that, (i) Shares are repurchased,
acquired or otherwise received by Counterparty or any of its subsidiaries after
the date hereof (whether or not in exchange for cash, fair value or any other
consideration), (ii) authorized and unissued Shares reserved for issuance in
respect of other transactions prior to such date which prior to the relevant
date become no longer so reserved or (iii) Counterparty additionally authorizes
any unissued Shares that are not reserved for other transactions. Counterparty
shall immediately notify BofA of the occurrence of any of the foregoing events
(including the number of Shares subject to clause (i), (ii) or (iii) and the
corresponding number of Shares to be delivered) and promptly deliver such Shares
thereafter.

 

A-3

--------------------------------------------------------------------------------

ANNEX B

 

Prepayment Amount:    USD 500,000,000 Scheduled Initial Period End Date:   
February 3, 2012 Earliest Initial Period End Date:    January 27, 2012 Scheduled
Final Averaging Date:    June 14, 2012 Scheduled Earliest Acceleration Date:   
April 20, 2012 Initial Shares:    14,988,010 Shares Discount:    USD 0.035
Collar Percentage:    75% Non-Collar Percentage:    25% Floor Price Percentage:
   92.5% Cap Price Percentage:    115.0% Maximum Stock Loan Rate:    50 basis
points Initial Stock Loan Rate:    25 basis points Threshold Price:    USD 10.00
Maximum Deliverable Number:    20,000,000

 

B-1